The Department of Labor has raised the overtime threshold

The Biden-Harris administration has announced a final rule that expands overtime protections for millions of lower-paid salaried workers by increasing the salary thresholds required to exempt certain employees from federal overtime pay requirements. Effective July 1, 2024, the salary threshold will increase to an annual salary equivalent to $43,888, and it will further rise to $58,656 on Jan. 1, 2025. This update replaces the current annual salary threshold of $35,568, based on the methodology used in the 2019 overtime rule update. Additionally, the rule will adjust the threshold for highly compensated employees. Beginning July 1, 2027, salary thresholds will be updated every three years using up-to-date wage data.

Acting Secretary Julie Su stated, "This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time." The department engaged extensively with various stakeholders before issuing its proposed rule in September 2023, considering over 33,000 comments in developing the final rule. The updated rule defines and delimits who is a bona fide executive, administrative, and professional employee exempt from the Fair Labor Standards Act’s overtime protections.

Wage and Hour Administrator Jessica Looman emphasized, "The Department of Labor is ensuring that lower-paid salaried workers receive their hard-earned pay or get much-deserved time back with their families." Key provisions of the final rule include expanding overtime protections to lower-paid salaried workers, providing more workers with pay or valuable time back with their families, and establishing regular updates to the salary thresholds every three years to reflect changes in earnings.