FLSA Overtime Rule Resources
Everything HR professionals need to know about the FLSA salary threshold
The FLSA overtime rule determines whether employees are eligible or exempt for overtime pay. Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a workweek. Nonexempt employees must be paid time and a half for any hours worked more than 40 in a workweek.
The Department of Labor announced issued a final rule on April 23, 2024, increasing the salary-level threshold for white-collar exemptions to $844 a week from $684 a week effective July 1, 2024, rising again to $1,128 a week, effective Jan. 1, 2025. The final rule is estimated to extend overtime protections to approximately 4 million workers who are not currently eligible under federal law.
Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular pay rate for all hours worked over 40 in a workweek.
Meeting the salary threshold doesn't automatically make an employee exempt from overtime pay; the employee's job duties also must primarily involve executive, administrative or professional duties as defined by the regulations.
HR professionals must know how to determine overtime eligibility for each employee.
Under the April 2024 final rule:
- The overtime rule raises the standard salary-threshold levels in two phases. Workers who do not earn at least $43,888 ($844 a week) as of July 1, 2024, would have to be paid overtime, even if they’re classified as a manager or professional. The salary-level threshold rises to $58,656 a year ($1,128 a week) as of Jan. 1, 2025. There are automatic increases to the salary threshold every three years.
- Nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis may be used to satisfy up to 10 percent of the standard salary level.
- The special rule for highly compensated employees would require workers to earn a total annual compensation of at least $151,164 ($1,128 of which must be paid weekly on a salary or fee basis).
- Special salary levels would apply to certain U.S. territories and an updated base rate would apply to employees in the motion-picture industry.
- No changes to the duties tests.
- The final rule is effective in phases, with one effective date July 1, 2024 and a second effective Jan. 1, 2025.
FLSA Overtime Rule Coverage
New Overtime Rule Takes Effect in Two Phases
Don’t Forget to Review Duties Tests for Overtime Exemptions
SHRM Member Resources:
SHRM members receive exclusive access to templates, tools, webcasts, how-to guides and more aimed at helping HR professionals get their organizations into compliance with the new overtime regulations. Anyone who is involved in HR, supervises the HR function or otherwise has an interest in HR is invited to join.
An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.
Related Content
HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.