DOL Raises Overtime Eligible Salary Level
Effective July 1, 2024, the U.S. Department of Labor (DOL) increased the Fair Labor Standards Act's (FLSA) annual salary-level threshold for white-collar exemptions from overtime requirements from $35,568 to $43,888.
Effective January 1, 2025, the salary threshold will increase to $58,656. Employees making less than the salary-level threshold, such as hourly workers, can be eligible for overtime if they work enough hours.
Beginning July 1, 2027, the DOL will automatically increase the overtime threshold every three years.
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Exemption from overtime under the FLSA's white-collar rule for executive, administrative, and professional employees must be paid a salary of at least the threshold amount and meet certain exemption 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 more than 40 in a workweek.
Employers that do not raise these employees' salaries should be prepared to pay overtime to these employees when they work more than 40 hours in a workweek.
Employers will need to decide if they raise the salary of those employees who earn above the overtime threshold under the old standard but below it under the new standard to remain exempt.
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