The rules on overtime pay will change soon: what you need to know

Rebecca Teutsch and Logan Sparkman

3 hours ago

(WHNT) — The U.S. Department of Labor will implement new overtime rules starting this summer to make millions of workers eligible for overtime pay.

Under current provisions of the Fair Labor Standards Act, hourly or non-exempt employees who work more than 40 hours per week are entitled to an overtime premium equal to 1.5 times their regular wages.

Salaried workers or those who receive a fixed amount of more than $35,568 per year ($684 per week) are exempt from the overtime provisions of the Fair Labor Standards Act, which means they are not entitled to overtime pay. These employees perform primarily executive, administrative, or professional duties as defined by Department of Labor regulations.

In April, the Department of Labor announced a new proposal aimed at increasing the number of Americans eligible for overtime pay.

Under the new rules, after July 1, compensated workers earning a maximum of $43,888 a year, equivalent to about $844 a week, will be eligible for overtime pay. The final version of the provision updates and revises the regulations issued pursuant to Art. 13 lit. a) point 1 of the Fair Labor Standards Act.

On January 1, 2025, the department is scheduled to raise the threshold again for people earning less than $58,656 a year, or $1,128 a week.

Capacity will be increased again on July 1, 2027, and every three years thereafter. The standard will be determined by the department to reflect current earnings data.

The Department of Labor estimates that 4 million wage-earners who were previously ineligible will be eligible. However, some professions, including teachers, doctors and lawyers, do not qualify for overtime pay and are therefore not affected by the change. In some states, such as California and New York, salary thresholds exceed the federal level.

The Associated Press contributed to this report.