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New Overtime Pay Rule Expands Eligibility for Millions of U.S. Workers

(WCTU) - The Department of Labor has announced a significant update to the Fair Labor Standards Act (FLSA), extending overtime pay eligibility to millions of additional salaried workers in the United States. The new rule, set to take effect on July 1, 2024, revises the salary thresholds that determine eligibility for overtime compensation.

Under the new regulation, salaried workers earning less than $43,888 per year will qualify for overtime pay if they work more than 40 hours a week. This marks a substantial increase from the current threshold of $35,568. The threshold will rise again on January 1, 2025, to $58,656 annually, with further adjustments planned every three years based on wage data trends.

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Jessica Looman, an official at the Department of Labor, emphasizes that "the promise of the Fair Labor Standards Act is that a hard day’s work deserves a fair day’s pay." The updated rule aims to restore and enhance this promise, ensuring that workers are compensated adequately for extended hours.

The new overtime rule stems from extensive public consultation, including 30 listening sessions nationwide and a review of over 33,000 written comments. The feedback from workers underscores the rule's potential impact, with many expressing that it would significantly improve their compensation for long work hours.

However, not all salaried employees will benefit from these changes. Exemptions apply to specific roles, including executive, administrative, or professional positions, where employees earn above the set salary thresholds. For highly compensated employees, the exemption threshold will increase to $132,964 on July 1, 2024, and then to $151,164 on January 1, 2025.

While the rule is a federal standard, states have the authority to enact more stringent overtime laws. As the implementation date approaches, employers and employees alike are encouraged to review job classifications and compensation structures to ensure compliance with the new standards.

Legal challenges to similar updates in the past suggest the possibility of litigation against this new rule as well. Nonetheless, the Department of Labor stands firm in its commitment to enhance worker protections and ensure fair compensation for overtime.

The Department of Labor urges workers and employers to visit the DOL website to learn more about the final rule.



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