Important Update: New Federal Overtime Pay Rule Affects 4 Million U.S. Workers

On April 25, 2024, the Biden administration announced a new rule extending mandatory overtime pay to approximately 4 million salaried workers in the United States. This rule, set to take effect on July 1, 2024, raises the salary threshold at which executive, administrative, and professional employees are exempt from overtime pay to $43,888 from the current $35,568 annually.

The July adjustment will make an additional 1 million workers eligible for time-and-a-half wages for hours worked beyond a 40-hour week. On January 1, 2025, the threshold will increase to $58,656, adding another 3 million workers to those eligible.

Key provisions of the rule include:

• Expanding overtime protections to lower-paid salaried workers.
• Ensuring that employees who are not “overtime exempt” receive time-and-a-half pay for working more than 40 hours per week, or alternatively, more time with their families.
• Implementing regular updates to the salary thresholds every three years to reflect changes in earnings and protect against the future erosion of overtime protections.

Next steps:

The rule may face legal challenges from industry groups, who argue that by raising the overtime standard, the Department of Labor (DOL) is overstepping its authority and imposing undue regulatory and financial burdens on businesses. Our team remains vigilant about the latest developments and will continue to provide updates. Please get in touch with your Whittlesey advisor if you need immediate assistance or have specific concerns regarding this new rule. We are here to help you navigate these changes smoothly.

Get In Touch