Federal overtime exemption threshold revised, but duties test remains the same

In late 2019, the salary threshold for exempting an employee from overtime pay was lowered. In March 2024, the Department of Labor (DOL) raised the threshold, expanding the number of employees eligible for overtime pay. However, by late 2024, the salary level reverted to the previous lower levels established during the first Trump administration in 2019. This updated threshold reduces the number of employees exempt from overtime. While these wage requirements have fluctuated in recent years, one constant remains—the duties test.

What is the duties test?

You should be aware that although the salary threshold has been reinstated to its prior level, the duties test for exemption still applies. This test determines whether an employee qualifies for exemption from overtime based on their specific job duties. Several categories of employees are not eligible for overtime, including those working in executive, administrative, professional, computer, and outside sales roles.

To qualify for overtime exemption, an employee must meet both the salary threshold and pass one of the stringent duties tests established by the DOL. The duties tests vary based on job type, but it’s important to note that overtime compensation is required for hours worked beyond 40 hours in a workweek, paid at a rate of at least one and a half times the regular wage.

Remind me, what is the salary threshold for overtime exemption?