Initial Change to the Federal Overtime Rule Goes Into Effect Today
|
Monday, July
1, 2024 -
As we previously
alerted you,
starting today
salaried workers
making less than
$43,888 per year may
now qualify for
overtime pay. The
threshold is set to
increase again to
$58,656 on January
1, 2025. Previously,
only salaried
workers making less
than $35,568
annually qualified
for overtime pay
when they worked
more than 40 hours
in a week.
The Fair Labor
Standards Act
(“FLSA”) regulates
when employees must
be paid minimum wage
and overtime. Under
the FLSA, overtime
pay, which is due to
all employees who do
not fall within a
specified exemption,
is one and one-half
times an employee’s
regular pay rate for
every hour that is
worked beyond 40
hours in a work
week. While hourly
workers are
generally entitled
to overtime pay,
salaried workers are
not if they earn
above a certain pay
level and supervise
other workers. That
pay level is what
the Department of
Labor recently
increased.
On
April 23, 2024, the
U.S. Department of
Labor (“DOL”)
announced the
release of a final
rule raising the
minimum annual
salary thresholds on
July 1, 2024 and
then again on
January 1, 2025.
This primarily
applies to
executive,
administrative, and
professional
employees, commonly
referred to as the
“White Collar
Overtime
Exemptions.”
When a similar rule
was supposed to take
effect in 2016, the
implementation was
paused at the last
moment by a federal
judge who held that
DOL exceeded its
authority by making
salary, rather than
job duties, the
controlling factor
for whether an
employee is an
exempt executive,
administrative, or
professional
employee. The 2016
rule never took
effect, although the
DOL approved a
smaller increase to
the minimum salary
level in 2019, to
the current $35,568
(or $684 per week).
Last week,
another federal
judge heard
arguments on a
motion to block
implementation of
the DOL’s new 2024
rule in the lawsuit
State of Texas v.
United States
Department of Labor.
The judge only
halted the law,
however, for workers
employed by the
state government of
Texas. Such limited
relief means, for
now, that the rule
is implemented and
that employers must
comply with the
revised threshold of
$43,888.
Besides the State of
Texas lawsuit,
business groups also
sued DOL in a
federal district
court in Texas on
the overtime rule,
claiming DOL went
beyond its authority
under the Fair Labor
Standards Act. While
the first increase
to $43,888 per year
is now in effect, it
is still to be
determined whether
the larger increase
in January will take
effect given the
ongoing lawsuits. We
will continue to
keep you apprised of
the legal
proceedings. |
|
|
