DOL Releases Updates on Overtime Salary Threshold

The news we’ve all been patiently (or impatiently) waiting for is finally here! The DOL has announced that it will publish a final rule raising the FLSA’s overtime salary threshold.

On Wednesday, August 30th, 2023 the DOL released a statement announcing their proposed changes to the current overtime rule threshold, plus a provision for automating regular updates every three years. Last year’s proposal stated that the DOL will increase the minimum salary threshold to $1,059 weekly, or $55,068 annually.

Let’s break down what the final rule states and its impact on employers.

DOL Raises Minimum Salary Threshold

On Tuesday, April 23rd, 2024 the DOL announced it will raise the overtime salary threshold to $43,888 on July 1st, 2024, and $58,656 on January 1st, 2025, a few thousand dollars higher than the original proposal. This final rule will enhance and strengthen employee rights to overtime pay under the Fair Labor Standards Act (FLSA).

According to the DOL’s press release, the final rule also includes the following key provisions:

Clarification on which employees are executive, administrative, or professional employees who should be exempt from overtime pay
Non-exempt employees receive overtime pay (time-and-a-half pay) when working more than 40 hours per workweek
Salary thresholds will be updated every three years so that protections continue to be effective

What Is the Overtime Threshold?

The overtime threshold is a salary level that helps employers determine which employees are eligible to receive overtime pay when they work more than 40 hours in a single workweek. Employees who make less than the annual or weekly threshold are considered non-exempt, which means they automatically qualify to receive overtime pay.

Currently, the overtime income threshold stands at $35,568/year or $684/week, which means that people who earn less than $35,568/year or $684/week automatically qualify for overtime. On a federal level, there is no maximum limit to overtime unless an individual is younger than 16 years old.

As Wage and Hour Administrator Jessica Looman told the DOL, the final rule “establishes clear, predictable guidance for employers on how to pay employees for overtime hours and provides more economic security to the millions of people working long hours without overtime pay.”

Additional Resources

You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources:

BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
BerniePortal Blog—a one-stop shop for HR industry news
HR Glossary—featuring the most common HR terms, acronyms, and compliance
Resource Library—essential guides covering a comprehensive list of HR topics
HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics