Expanded Overtime Protections for Workers

Last year, the U.S. Department of Labor published a proposed rule expanding overtime protections to a wider population of employees.

Under existing Department of Labor rules, full-time salaried workers earning less than $35,568 annually, or $684 per week, are guaranteed overtime pay.  The proposed rule would increase the salary threshold to $55,000 annually, or $1,059 per week.

Department of Labor projections indicate that this change will create overtime protections for an additional 3.4 million employees.  The new rule also increases the minimum salary for the highly compensated employee exemption from $107,432 annually to $143,988 annually. 

This rule may be finalized as early as April and take effect as early as June.

Similar changes to overtimes rules and exemptions have already taken effect in the State of New York in recent months.

In December of 2023, the New York State Department of Labor increased the minimum salary thresholds for exempt executive and administrative employees in New York City and its surrounding counties to $62,400 annually, or $1,200 per week.  Throughout the rest of New York State, the salary threshold for this same population of employees increased to $1,124.20 per week, or approximately $58,458.40 per year.

These thresholds will continue to increase incrementally in 2025 and 2026.

Employers impacted by these changes should review their employee salaries and payroll practices to ensure compliance.

Now may be a good opportunity to compile a list of employees impacted by these changes and decide whether to raise their salaries to meet the new thresholds or convert them to non-exempt status.  This is only part one of an employer’s review.  Employers should also consider employees’ job duties and responsibilities to determine whether their current duties and responsibilities qualify for an exemption.

Adjustments to employee compensation and exempt status can impact a company’s budget, so consider including personnel from human resources, legal, and finance in these discussions.