Considerations for Business Owners and Managers.
New Overtime Regulations
On April 23, 2024, the U.S. Department of Labor announced a final rule to raise the salary threshold for certain overtime exemptions.
The final rule raises the minimum salary thresholds in two steps.
July 1, 2024:
- The salary threshold will increase to $844 per week or $43,888 per year (a 23% increase over current levels).
- The salary threshold for highly compensated employees will increase from $107,432 to $132,964 per year (a 23% increase over current levels).
January 1, 2025:
- The salary threshold will increase to $1,128 per week or $58,656 per year (a 64.9% increase over current levels).
- The salary threshold for highly compensated employees will increase to $151,164 per year (a 41% increase over current levels).
The rule is considered a “major rule” and cannot take effect for 60 days. During this time, the ruling could be challenged in court.
We recommend that you review your salaries and classification policies to determine what approach you would use to comply with the rule, if and when it becomes effective. Because the rule could be struck down, you may wish to plan for implementation but hold off on taking action for as long as possible.
Options to consider if someone’s salary is under the new thresholds:
- Increase their salary to the new minimum; or
- Change their status to hourly, non-exempt and pay overtime.
| WHAT CAN A PEO DO FOR YOU? |
| When a business joins a PEO the PEO will identify employees who do not currently meet the new salary threshold requirements and, if applicable, provide you with the information needed to prepare your plan of action.Your PEO will continue to monitor the ruling and share updates as necessary. If the final rule is not overturned, contact your PEO HR support before your first payroll in July 2024.
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