Federal Overtime Salary Rules – Effective July 1, 2024
As previously communicated, the Department of Labor finalized new overtime rules expanding overtime eligibility to an estimated 4 million employees starting July 1, 2024.
The new standard salary level for the Executive, Administrative, and Professional (EAP) exemption increases are:
- $35,568 ($684 per week), currently
- $43,888 ($844 per week), effective July 1, 2024
- $58,656 ($1,128 per week), effective January 1, 2025
The new Highly Compensated Employee (HCE) compensation increases are:
- $107,432 per year, currently
- $132,964 per year, effective July 1, 2024
- $151,164 per year, effective January 1, 2025
The standard salary level amounts are included in the HCE amounts. The salary and HCE compensation thresholds will be regularly updated every three years beginning July 1, 2027. The final overtime rule does not apply to U.S. territories.
What should you do as an employer?
This excerpt on suggested actions is taken directly from the Department of Labor FAQ Overtime Rules, linked below. Employers have a range of options for responding to the updated thresholds established in this rule. For each employee who is affected by the increased earnings threshold, an employer may:
- Increase the salary of the employee to at least the new salary level to retain their exempt status;
- Pay an overtime premium of one and a half times the employee’s regular rate of pay for any overtime hours worked;
- Reduce or eliminate overtime hours;
- Reduce the amount of pay allocated to the employee’s base salary (provided that the employee still earns at least the applicable hourly minimum wage) to offset new overtime pay; or
- Use some combination of these responses.
We encourage you to identify employees who will now be eligible for Overtime, ensure their FLSA status is accurate, and take action to update earnings records if required.
- An Employee Roster report is available in your Business Intelligence Environment via the following path – zzzCompanyFolders > Your Company Name > PlanSource Delivered Reports > *Featured Reports* > HR Reports.
Please reach out to the HCM Service Team if you do not see this report or if you need assistance identifying a different Business Intelligence report to review salary details and current FLSA exemption status.
The DOL’s FAQ resource is linked here:
If you have ANY questions, please contact the HCM Service Team at 407-447-3837 or via email: hcmservice@plansource.com
