Department of Labor Finalizes New Overtime Pay Rule

Early last week, the Department of Labor (DOL) published a final rule updating overtime pay regulations. The new standard has tiered increases and effective dates for both the minimum salary threshold and highly compensated employees (HCE). The minimum salary threshold, under which workers are eligible for overtime pay is currently set at $35,568. This threshold will increase to $43,888 on July 1 and then to $58,656 on January 1, 2025; representing more than a 60% increase over the current threshold. The current HCE threshold of $107,432, above which workers are not eligible for overtime pay, will be raised to $132,964 on July 1 and then to $151,164 on January 1, 2025; a 41% increase. The final rule also provides for automatic updates every three years for the minimum salary and the HCE thresholds.

NRMCA worked with the Partnership to Protect Workplace Opportunity (PPWO) to oppose these increases. In response to the DOL’s announcement the coalition stated, “PPWO is disappointed in DOL’s decision to issue this final rule without substantive changes from the proposal, despite significant concerns from businesses, nonprofits, higher education institutions, and the public sector. The Department is raising the minimum salary threshold over 60%. This raise in labor costs simply cannot be absorbed by businesses, especially small businesses. Meanwhile, automatic increases are unlawful, invite inflation, create uncertainty for businesses, and will exacerbate struggles during economic downturns. Under this rule, many workers will be reclassified and lose workplace status, benefits, and opportunities for growth and advancement.” Multiple industry stakeholders have stated they are mulling litigation to challenge the final rule.

Click here for more information and to review the final rule. The NRMCA staff contact is Kevin Walgenbach.