DOL Issues Final Rule for Overtime Exemptions

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Today, April 23rd, 2024, the U.S. Department of Labor unveiled a final rule that increases the salary limit for overtime exemptions, finalizing elements of a proposal previously met with opposition from Republican representatives and the business sector.


This regulation, titled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” was initially proposed in September. It establishes exclusions from overtime pay requirements under the Fair Labor Standards Act for bona fide executive, administrative, and professional employees whose duties and salaries meet certain criteria.


Jessica Looman, Administrator of the DOL Wage and Hour Division, commented during a press briefing on Tuesday, “The rule finalized today not only reinstates but broadens overtime protections for lower-paid salaried employees, safeguards against future dilution of these protections, and enhances predictability.”


The new rule will increase the salary threshold to an annual equivalent of $43,888 beginning July 1 ($844/week), using the current calculation method, and will further rise to $58,656 on January 1, 2025 ($1128/week), based on a revised methodology. This is a significant rise from the present weekly rate of $684, or $35,568 annually.



The update slated for 2025, which is expected to affect three million workers, is calculated using the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region of the United States, specifically the Southern region.


Moreover, the rule boosts the overtime salary threshold for highly compensated employees to $132,964 in July and then to $151,164 in January, correlated with the 85th percentile of national salaries for such workers, an increase from the existing threshold of $107,432.


The rule includes provisions for automatic adjustments every three years, based on the most recent salary data.


Stay tuned as the details unfold!



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