The Biden-Harris administration has finalized a rule aimed at expanding overtime protections for millions of lower-paid salaried workers. Effective July 1, 2024, the new rule increases the salary threshold for overtime exemption to an annual salary of $43,888, with a further increase to $58,656 on January 1, 2025. These adjustments update the current threshold of $35,568, set in 2019. The rule also introduces a new methodology for determining highly compensated employees and mandates salary threshold updates every three years starting July 1, 2027, to ensure they reflect current wage data.
This rule, developed after extensive consultations and over 33,000 public comments, aims to restore fairness in compensation for salaried workers who work over 40 hours a week. Acting Secretary Julie Su emphasized that the rule would help salaried workers who often work the same hours as their hourly counterparts without additional pay. Wage and Hour Administrator Jessica Looman highlighted that the rule offers clear guidance for employers and economic security for employees. Key provisions include expanded overtime protections, ensuring non-exempt employees receive appropriate overtime pay or more family time, and regular updates to salary thresholds to maintain the effectiveness of overtime protections.
