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What To Expect From The DOL ' s Final Overtime Rule
By Leslie Selig Byrd and Deryck Van Alstyne ( May 1 , 2024 , 4:36 PM EDT )
On April 23 , the U . S . Department of Labor released its highly awaited final overtime rule .
The final rule dramatically increases the salary threshold for white collar workers to be exempt from overtime under the Fair Labor Standards Act . The rule substantially affects most , if not all , employers currently relying on an overtime exemption .
As implied by the name of the final overtime rule , " Defining and Delimiting the Exemptions for Executive , Administrative , Professional , Outside Sales and Computer Sales ," the DOL ' s substantial increase in the minimum salary required for eligibility for these exemptions will contribute to more limited use of the overtime exemptions .
Leslie Selig Byrd
Unless enjoined by anticipated challenges , the rule is effective July 1 . New Salary Levels
Effective July 1 , executive , administrative , or professional employees , or EAP , must receive a minimum salary of $ 43,888 per year — or $ 844 per week — to qualify for the salary requirement of the EAP exemptions .
Effective Jan . 1 , 2025 , the minimum salary amount increases for the EAP exemptions to $ 58,656 per year , or $ 1,128 per week .
Deryck Van Alstyne
For highly compensated employees , the annual compensation threshold increases to $ 132,964 per year on July 1 , and to $ 151,164 per year on Jan . 1 , 2025 . For HCEs , while there is some flexibility in accruing this total , HCEs must receive at least $ 844 per week and then $ 1,128 per week on a salary basis .
To appreciate the significant monetary increase , the current thresholds implemented in January 2020 are : $ 35,568.00 per year minimum salary for the EAP exemptions and $ 107,432.00 per year for HCEs .
The DOL estimates that approximately 4 million workers will qualify for overtime when the rule is fully implemented in January 2025 .
Automatic Inflation-Based Salary Increases
Similar to the Obama administration ' s 2016 rule , which was completely stalled by legal challenges , the