BREAKING NEWS: Final Overtime Rule Released
The new federal overtime rule, scheduled to take effect on July 1, 2024, increases the minimum salaries necessary to exempt executive, administrative, professional, and highly compensated employees from the Fair Labor Standard Act’s overtime pay requirements. Specifically, under the new final rule:
- On July 1, 2024, the minimum or “standard salary level” will increase from $684 to $844 per week (equivalent to $43,888 per year).
- On July 1, 2024, the total annual compensation level for “highly compensated employees” will increase from $107,432 to $132,964 per year, including at least $844 per week paid on a salary or fee basis.
- On January 1, 2025, the minimum or “standard salary level” will increase further from $844 to $1,128 per week (equivalent to $58,656 per year);
- On January 1, 2025, the total annual compensation level for “highly compensated employees” will increase further from $132,964 to $151,164 per year, including at least $1,128 per week paid on a salary or fee basis.
- On July 1, 2027, and every 3 years thereafter, the minimum salaries will be updated by applying a methodology used to set the salary level in effect at the time of the update.
The new final rule does not change the duties portions of the otherwise affected exemptions. Regardless, this is a good but limited time for employers to audit their pay practices to make sure that employees are properly classified, update timekeeping and payroll systems, and train reclassified employees on new processes before the rule takes effect on July 1, 2024 (unless any interim legal challenges are filed and alter that date).
For more information about the new federal overtime rule, go to: https://www.dol.gov/agencies/whd/overtime/rulemaking. For guidance on how the final rule may impact your business, please contact one of our Employment Attorneys.
Gail E. Farb
941-552-2557
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