U . S . DOL ISSUES NEW GUIDELINES REGARDING OVERTIME written by Beth Smoller , KAIA
The U . S . Department of Labor (“ DOL ”) issued a final rule earlier this year that will take effect July 1 , 2024 . The rule revises regulations under the Fair Labor Standards Act (“ FLSA ”). The revisions include an increase in the minimum salary level , an increase to the annual compensation threshold for highly-compensated employees , and a mechanism for updating those earning totals in a more timely manner .
As background , the FLSA provides exemptions for paying overtime to certain employees . In order to be exempt from overtime pay , i . e ., not entitled to overtime pay , an employee generally has to meet three criteria : 1 . Be paid a salary . Employees who earn an hourly wage or whose wage is subject to decrease due to the amount of time they work or the quality of their work would not fit this criteria . 2 . The salary the employee is paid must be a minimum amount . 3 . Perform primarily executive , administration , or professional (“ EAP ”) duties . Outside sales employees and certain computer employees also fall under this category . More information about who falls into the EAP category along with others in the socalled “ white-collar ” exemption can be found below .
In addition to the three criteria above , there is a separate category for outside sales , computer , and highly compensated employees who perform certain duties and also meet a minimum salary level .
Beginning July 1 , 2024 , the minimum annual salary an employee must make in order to be exempt from earning overtime pay will be $ 43,888 . That equates to $ 844 per week ( the previous annual salary was $ 35,568 or $ 684 per week ). For highly compensated employees , the minimum salary will be $ 132,964 ( the previous amount was $ 107,432 ).
In addition , the amounts will increase again on Jan . 1 , 2025 . $ 58,656 will become the minimum annual salary ($ 1,128 per week ). The minimum annual salary for highly compensated employees will be $ 151,164 ($ 1,128 per week ).
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