The United States Department of Labor (“DOL”) implemented a new overtime regulation that will make some lower–paid salary employees eligible for overtime pay. Bona fide executive, administrative, or professional salary employees may be exempt from overtime if their employers pay them a salary that meets the minimum threshold amount.
Currently, the minimum salary is $35,568 a year or $684 a week and beginning July 1, 2024, it will increase to $43,888 annually or $844 per week. It is also set to increase again on January 1, 2025, to $58,656 a year. After July 1, 2024, if an employee makes less than $884 a week, they will be eligible for overtime pay in the United States under the new rule. States may have a higher minimum salary threshold for overtime exemptions, which would apply in that state if higher.
Between 1938 and 1975, the Department of Labor would increase the minimum salary every 5 to 9 years historically. But those periodic increases slowed substantially since then. The minimum salary threshold will be updated every three years beginning on July 1, 2027, under this new DOL regulation.
The DOL’s final rule will also impact the highly compensated employees overtime exemption. Starting July 1, 2024, that qualifying salary threshold will increase from $107,432 to $132,964 per year.