Just a quick update about the Fair Labor Standards Act (FLSA) Overtime change. The Department of Labor (DOL) has announced some changes to how overtime pay is determined for certain employees. The rule increases this minimum salary threshold for exemption (salaried), initially to $844 per week ($43,888 per year) as of July 1, 2024, and then to $1,128 per week ($58,656 per year) as of January 1, 2025. For highly compensated employees, the salary threshold will also rise to $132,964 per year by July 1, 2024, and $151,164 per year by January 1, 2025. The new rule provides for an automatic update to the threshold every three years based on wage data.

What does this Mean? These changes mean that more employees may become eligible for overtime pay if they earn less than these amounts. Additionally, the salary threshold for highly compensated employees will also increase. These adjustments are based on the Department of Labor's historical approach, aiming to ensure fair compensation for employees. We'll need to adjust our payroll practices accordingly to ensure compliance with these new rules.

It's important to note that while these changes provide a general overview of the new thresholds, further details and legal considerations may be necessary for full compliance with these regulations.

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Require assistance in deciding which positions should be classified as exempt (salaried) or non-exempt (hourly)? Job titles do not determine an exemption status under the FLSA. Drop us an email for guidance.