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ARTICLE · 21 MAY 2024

DOL's Overtime Rule Increases Salary Threshold For Exempt Workers

On April 23, 2024, the U.S. Department of Labor (DOL) issued a final rule raising the salary threshold that must be met for employees to be classified as exempt from overtime requirements imposed...

United StatesEmployment and HR

On April 23, 2024, the U.S. Department of Labor (DOL) issued a final rule raising the salary threshold that must be met for employees to be classified as exempt from overtime requirements imposed by the Fair Labor Standards Act (FLSA). DOL estimates that more than 3 million currently exempt employees will be impacted. It further estimates that total annualized direct employer costs over the first 10 years will be about $600 million. Employers should take steps now to ensure that they are prepared to comply with the final rule.

Background

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for bona fide executive, administrative, professional and outside sales employees.

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