The U.S. Department of Labor has increased the Fair Labor Standards Act's (FLSA's) annual salary-level threshold from $35,568 to $58,656 as of Jan. 1, 2025, for white-collar exemptions to overtime requirements. Effective July 1, 2024, the salary threshold will increase to $43,888. Employees making less than the salary-level threshold, such as hourly workers, can be eligible for overtime if they work enough hours.
Starting July 1, 2027, the department also will automatically increase the overtime threshold every three years.
To be exempt from overtime under the FLSA's “white collar” executive, administrative and professional exemptions—the so-called white-collar exemptions—employees must be paid a salary of at least the threshold amount and meet the “duties” tests. If they are paid less or do not meet the tests, they must be paid 1 1/2 times their regular hourly rate for hours worked in excess of 40 in a workweek.
Although the rule may face legal challenges, employers should be prepared to comply with the rule in its current form. If you have questions about the rule or its implementation, please contact one of the employment law attorneys at PLDR Law.
