Employers mull effect of election results on next FLSA overtime threshold

by Tammy Binford

Employers are preparing for the next update to the Fair Labor Standards Act (FLSA) overtime threshold—scheduled for January 1, 2025—but they also are wondering how the new level will fare under the incoming Trump administration.

Scheduled salary threshold increase in question

The FLSA requires that covered employees receive overtime pay of at least time and a half their regular hourly rate whenever they work more than 40 hours in a workweek, but certain employees are exempt from that requirement.

Among them are employees who perform executive, administrative, or professional duties and are paid a salary above the law’s minimum threshold, which currently is $844 a week ($43,888 a year). Prior to July 1, 2024, the minimum threshold for exempt status was $684 a week ($35,568 a year).

Another increase to the threshold is scheduled for January 1, 2025, when it is set to go up to $1,128 a week ($58,656 a year). However, that new threshold may fall victim to court challenges to the U.S. Department of Labor’s (DOL) overtime rule.

Without a court ruling striking down the January 1 increase, employers with employees who are currently deemed exempt but earning below the next threshold will have to decide whether to increase those employees’ pay or reclassify them as nonexempt, making them eligible for overtime.

Election’s effect?