DOL Releases New Overtime Rule
The U.S. Department of Labor (DOL) issued a final rule aimed at ensuring fair compensation for lower paid workers who work more than 40 hours a week. This rule will require employers to provide time-and-a-half pay for qualified salaried employees who exceed the 40-hour threshold and who are below a certain salary threshold. The new rule will be implemented in two stages, with the first stage beginning on July 1. In July, the threshold will rise to an annual salary equivalent of $43,888, up from the current threshold of $35,568. On Jan. 1, 2025, the threshold will increase further to $58,656.
By raising the salary threshold, an estimated 4 million lower paid, salaried workers who were previously exempt from overtime protection will become eligible as of July 1. The Biden administration believes that this move represents a significant step towards addressing wage inequality and ensuring that workers are compensated fairly for their time and effort.
Another important provision in the rule would require automatic updates to salary thresholds effective every three years starting on July 1, 2027, based on current wage data at the time. This means employers will need to reassess exempt classification every three years.