Department of Labor Announces New Salary Amounts Impacting Overtime Eligibility
The U.S. Department of Labor recently announced its final overtime rule raising the salary amount for certain overtime exemptions under the Fair Labor Standards Act. Under the new rule, employees who are considered exempt from overtime under the executive, administrative, or professional exemptions must receive a higher minimum salary or else they are entitled to overtime under federal law.
Effective July 1, 2024, the Department of Labor rule increases the salary threshold for an employee to be considered exempt under the executive (manager), administrative, and professional exemptions from $684 per week ($35,568 per year) to $844 per week ($43,888 per year). If an employee classified as exempt under one of those categories earns less than that salary requirement, they will be entitled to overtime for hours worked over forty in a workweek.
Effective January 1, 2025, the salary threshold increases again to $1,128 per week ($58,656 per year). The final rule also includes automatic increases to the salary threshold every three years beginning on July 1, 2027.
Even if an employee is paid the minimum salary requirements, they may not be exempt depending on their job duties. An employee’s actual job duties - what they do on a day to day basis - must be analyzed to determine if they qualify for the exemption. The employee’s job title or written job description is not conclusive; what matters is the work the employee actually performs. The new rule from the Department of Labor does not change the job duties analysis for the exemptions at issue.
While it is expected that the new Department of Labor rule will be challenged in court, employees should remain mindful of the increases. If the rule is upheld, many employees should either be getting a raise to their salary or paid overtime. If you are an employee classified as exempt from overtime under the executive, administrative, or professional exemptions to the Fair Labor Standards Act and believe you may be entitled to overtime, contact our labor lawyers today to see if we an help you recover the wages you’re entitled to.