Starting on July 1, U.S. employees who earn a weekly salary of at least $844 must be paid overtime when they work additional hours. This is up from the previous exempt level of $684 per week. This means that salaried workers earning up to almost $44,000 annually can now qualify for OT pay. That’s approximately an additional one million workers.
The July change is just the first step in regularly scheduled salary exemption adjustments for employees across the country announced this spring by the U.S. Department of Labor (DOL). At the start of 2025, the weekly salary at which employees will be exempt from OT pay will rise to $1,128, which works out to $58,700 annually. That second increase will add another three million people to the list of employees throughout the U.S. who will require OT pay if they work OT.
Regular increases are planned
The DOL says its plan is to increase the salary threshold for exemption every three years to keep up with the cost of living. This historically hasn’t happened. It’s been more than four years since the last increase.
An official with the DOL said that a regular adjustment “restores and extends OT protections to lower paid salary workers and prevents a future erosion of OT protections while ensuring greater predictability.”
The plan is to regularly increase the minimum salary for exemption from OT pay every three years. However, these things are dependent on who is in power at the federal level. Over roughly the past 50 years, these adjustments haven’t been made regularly. The latest adjustment is the first in over four years.
A DOL official says that the announced threshold increase “restores and extends overtime protections to lower paid salary workers and prevents a future erosion of overtime protections while ensuring greater predictability.”
Impacted employees and supervisors need to be informed
It’s crucial for employers to make their employees who are affected by these changes – and their supervisors — aware of them. Employees should make their bosses aware of when a request or order that they stay longer or come in on an additional day will result in OT pay.
Certainly, no employer should require or even ask an employee not to report their OT. That’s a violation of the law. If you have any questions or concerns about the new and upcoming OT exemption thresholds, it’s smart to get legal guidance.
