Millions more U.S. workers eligible for overtime under final DOL rule

Over the past seven years, the U.S. Department of Labor (DOL) has attempted to increase the number of exempt employees who are eligible for overtime under the Fair Labor Standards Act (FLSA). On April 23, 2024, the DOL announced a final rule regarding the salary threshold required to exempt a salaried executive, administrative, or professional employee from federal overtime pay requirements. It’s estimated that four million more American workers will be eligible for overtime under the new rule.

New rule increases threshold, adds automatic updates

Under the newly issued rule—effective July 1, 2024—the FLSA regulations’ standard salary level for white-collar exempt workers increases from $684 per week to $844 per week ($43,888 per year). Effective January 1, 2025, the level will increase again from $844 per week to $1,128 per week ($58,656 per year).

Starting July 1, 2027, salary thresholds will update every three years by applying up-to-date wage data to determine the new salary levels. This means employers will need to monitor changes in salary threshold requirements and regularly review whether employees are properly classified as exempt.