The Department of Labor’s new overtime rule will take effect on Monday, July 1, 2024, increasing the baseline salary for the so called “white collar” exemptions to $43,888 annually, or $844 per week. This will cause many exempt employees to become non-exempt under the Fair Labor Standards Act, making them eligible for minimum wage and overtime pay.
To avoid paying overtime, employers need to either raise the salary of affected employees, or limit their work to 40 hours per week. The threshold will again increase on Jan 1, 2025 to $58,656 or $1,128 per week, and again on July 1, 2027, and every three years thereafter. Several lawsuits have been filed challenging the rule, however employers must comply with the rule in its current form. We will update you regarding the status of the January 1 increase once a decision is made on the lawsuits challenging the rule. In the meantime, please reach out to us if you have questions regarding how the rule currently affects your business.
