For Immediate Release: May 10, 2024

New USDOL Overtime Rule to Go into Effect July 1

The rule includes increases to the standard salary level, and provides for future updates every three years to reflect current earnings data.

AUGUSTA?? On April 23, 2024, the U.S. Department of Labor announced a final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which will take effect on July 1, 2024.

The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional (EAP) employees. Revisions include increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for the updating of these earnings thresholds to reflect current earnings data. While this new rule will take effect in Maine, Maine law does not have an exemption from overtime for highly compensated employees.

Background:

Employees are exempt from the Fair Labor Standards Act?s minimum wage and overtime protections if they are employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in the Department?s regulations at 29 CFR part 541. To fall within the EAP exemption, an employee generally must meet three tests:

• be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed;
• be paid at least a specified weekly salary level; and
• primarily perform executive, administrative, or professional duties, as provided in the Department?s regulations.

The Department?s regulations also provide an alternative test for certain highly compensated employees who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.

The final rule will increase the standard salary level and the highly compensated employee total annual compensation threshold on the rule?s effective date on July 1, 2024, and on January 1, 2025, when changes in the methodologies used to calculate these levels become applicable. The final rule also provides for future updates of these levels every three years to reflect current earnings data.

How will this affect Maine?

When there is both a federal and state wage and hour law, whichever law is most protective is the enforced law. In this case, this means that the new federal rule will be enforced in Maine by the Maine Department of Labor beginning on July 1, 2024 ? except for the exemption from overtime for highly compensated employees.

• The current minimum salary in Maine is $816.35 per week.
• The new minimum salary as of July 1, 2024 will be $844 per week.
• The new minimum salary as of January 1, 2025 will be $1,128 per week.

More information on the rule can be found on the U.S. Department of Labor?s website: https://www.dol.gov/agencies/whd/overtime/rulemaking

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