Introduction to the New Overtime Salary Thresholds

The US Department of Labor has issued its Final Rule on new overtime salary thresholds, marking significant changes under the Fair Labor Standards Act for executive, administrative, and professional (EAP) employees.

This development is pivotal for businesses as it adjusts the exemption criteria from minimum wage and overtime pay requirements.


Key Provisions of the Updated Overtime Rule

The Final Rule introduces several critical updates that employers need to understand and prepare for:

  • Immediate Adjustments: Starting July 1, 2024, the salary threshold for overtime exemptions will increase to $43,888 annually, which breaks down to a weekly rate of $844.
  • Future Increases: On January 1, 2025, this threshold will rise to $58,656 per year, or $1,128 weekly.
  • Thresholds for Highly Compensated Employees: The salary threshold for highly compensated employees will jump to $132,964, with a future increase slated to reach $151,164.
  • Scheduled Updates: Additionally, the Department of Labor plans for an automatic adjustment every three years, starting from July 1, 2027, which will be subject to further rulemaking to ensure the thresholds reflect current economic conditions.

Implications for Businesses

With the new thresholds set, it’s crucial for businesses to reassess the salaries of currently exempt employees:


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  • Compliance Requirements: Employers must ensure salaries for exempt employees meet or exceed the new thresholds to maintain their exempt status.
  • Reclassification Considerations: Any employee whose salary falls below the new thresholds by the specified dates will need to be reclassified as non-exempt, or their salary adjusted accordingly.
  • State-Specific Compliance: In states where the salary thresholds for exemption are higher than the federal levels, employers are obligated to comply with the state standards.

Strategic Actions for Employers

In response to these updates, employers should take proactive steps to ensure smooth transitions:


New Overtime Thresholds Strategic Actions For Employers: New Overtime Thresholds Strategic Actions For Employers: White background featuring multiple playing cards surrounding a group of small tiles spelling "Strategy".

  • Salary Reviews: Conduct thorough reviews of all exempt employee salaries to determine if adjustments are necessary to meet the new federal or state-specific thresholds.
  • HR Training and Updates: Keep your HR team informed and well-equipped to handle reclassifications and adjustments as required by the new rule.
  • Plan for Future Adjustments: Prepare for the automatic adjustments scheduled for 2027 by setting reminders and creating a financial plan to accommodate potential increases in salary thresholds.

Navigating New Overtime Regulations: Let’s Get to Work…

The new overtime salary thresholds represent a significant regulatory change that will impact many businesses.

By understanding these changes and preparing in advance, businesses can help ensure compliance and minimize disruptions to their operations.

Stay informed and consult with legal experts to navigate these new regulations effectively.

Let’s get to work…


About the Author: Lorisa LaRocca, General Counsel


Lorisa Larocca, General Counsel at TalentBridge

General Counsel Lorisa LaRocca joined TalentBridge after spending 20 years as an attorney with Woods Oviatt Gilman, LLP, in Rochester, New York.

She most recently served as partner and chair of the firm’s labor and employment practice and the firm’s human resources liaison. She was co-founder and co-chair of the firm’s Women’s Initiative Program; founder and past chair of its Great Place to Work Committee; and chair of the firm’s Diversity, Equity and Inclusion Committee.

In 2023, LaRocca also founded Spark HR Consulting, which will now partner with TalentBridge to provide day to day HR counseling and advice, assistance with employment related policies and documents, workforce training and development, DEI strategies and training, benchmarking and compensation analysis, succession planning, risk management and compliance, and more.