New DOL Overtime Rules Effective July 1, 2024: What You Need to Know
The Department of Labor (DOL) has announced significant changes to the Fair Labor Standards Act (FLSA) overtime rules, effective July 1, 2024. These updates will impact the minimum salary thresholds required for employees to be exempt from overtime pay.
Key Changes
Effective July 1, 2024: The salary threshold for exempt employees will increase to $43,888 annually.
Effective January 1, 2025: The threshold will rise again to $58,656 annually.
Highly Compensated Employees: The threshold will increase to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025.
Why This Change?
These updates aim to provide more economic security to workers who put in long hours without overtime pay and to ensure pay equity for salaried managers, potentially earning less than their hourly counterparts once overtime is considered.
Is it Really Going to Happen This Time?
Despite previous delays, the current momentum and recent announcements indicate that the new rules will take effect as planned. While there may be challenges, it is unlikely that the ruling will be overturned before the effective dates.
Steps to Prepare
Identify Affected Employees: Make a list of employees earning between the current and new thresholds.
Consider Reclassification: Decide whether to reclassify employees as hourly non-exempt or adjust their salaries to meet the new exempt threshold.
Review Job Descriptions: Ensure job descriptions align with exemption criteria beyond salary, including job duties and responsibilities.
Communicate Changes: Provide advance written notice of any pay or classification changes to affected employees.
Detailed Considerations
For Hourly Non-Exempt Employees, plan how to track time, manage overtime, and determine their new hourly rate. Review the potential impact on benefits and employee morale.
For Salaried Exempt Employees, ensure job descriptions meet exemption criteria and compare salaries to market rates to remain competitive. Provide clear, written notice of any changes.
Conclusion
The new DOL overtime rules will require significant adjustments for many businesses. By taking proactive steps now, you can ensure compliance and minimize disruption to your operations.
For more detailed information, visit the Department of Labor’s website.
If you need assistance with these changes, R Accounting Group is here to help. Contact us at Sheri@RAccountingGroup.com for personalized support.
