The U.S. Department of Labor (DOL) today issued its final rule altering the overtime regulations under the Fair Labor Standards Act (FLSA). The rule includes two-tiered increases to the minimum salary threshold and the threshold for highly compensated employees (HCEs) as well as automatic updates to both thresholds moving forward.
The minimum salary threshold will increase to $43,888 on July 1, and then to $58,656 on Jan. 1, 2025. This represents a more than 60% increase over the current $35,568 threshold. The DOL clarified that the first increase updates the minimum salary threshold using the Department’s current methodology, which was used in the 2019 overtime rulemaking to set the current standard. The second increase then implements the Department’s new preferred methodology, which sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region.
Furthermore, the HCE threshold will jump to $132,964 on July 1, and then to $151,164 on Jan. 1, 2025 – a 71% increase from the current threshold of $107,432. This threshold is set to the 85th percentile for full-time salaried workers nationally. The final rule also implements automatic updates to both the minimum salary threshold and the HCE threshold, both of which will increase every three years.
Employer organizations are considering litigation challenging the rule. TRSA is working with coalition members to file a request with the DOL to extend the implementation timeline.
Questions? Contact TRSA’s Vice President of Government Relations Kevin Schwalb at kschwalb@trsa.org.
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