Federal News: New Overtime Rule
The US Department of Labor (DOL) has released its Overtime Final Rule. The final rule increases the minimum salary level for exempt employees, effectively expanding the pool of employees eligible for overtime pay. This will increase nonprofits’ overhead costs and also improve compensation for employees of the nonprofit sector.
The new Overtime Final Rule requires increases on the following timeline:
On July 1, 2024, the standard salary threshold will increase to $844 per week/$43,888 per year (from the current level of $684 per week/$35,568 per year).
On January 1, 2025, the salary level will increase to $1,128 per week or $58,656 per year.
Beginning July 1, 2027, the salary threshold automatically adjusts for inflation every three years.
US DOL is also adjusting the special threshold for highly compensated employees, a threshold that reduces the level of scrutiny regarding exempt employees’ duties:
On July 1, 2024, the threshold for highly compensated employees will increase from the current level of $107,432 to $132,964 per year.
On January 1, 2025, the threshold for highly compensated employees will increase to $151,164 per year.
- Beginning on July 1, 2027, the threshold automatically adjusts for inflation every three years.