Overtime pay rules to change soon: What to know
(WHNT) — The U.S. Department of Labor will set in motion new overtime rules starting this summer to allow millions of workers to be eligible for overtime pay.
Under the current regulations of the Fair Labor Standards Act, hourly or non-exempt employees who work over 40 hours a week are entitled to overtime compensation of 1.5 of their regular pay.
Salary workers, or those who are paid a fixed amount above $35,568 per year ($684 per week) are exempt from the Fair Labor Standards Act's overtime regulations, meaning they are not entitled to overtime pay. Those employees primarily perform executive, administrative, or professional duties, as provided in the Department of Labor’s regulations.
In April, the Labor Department announced a new motion to expand how many Americans are eligible for overtime pay.
Under the new rules, after July 1, salary-compensated employees who make $43,888 or less a year, equivalent to about $844 per week, will be eligible for overtime pay. The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act.
On January 1, 2025, the Department is set to raise the threshold again to those who make under $58,656 per year, or $1,128 per week.
The capacity will be raised once again on July 1, 2027, and every three years after. The standard will be determined by the department to reflect the current earnings data.
The Labor Department estimates that 4 million salaried workers who weren’t previously eligible will qualify. Some occupations, though, including teachers, doctors and lawyers are not eligible for overtime pay and thus are not affected by the change. And some states, like California and New York, already have salary thresholds that exceed the federal level.
The Associated Press contributed to this report.