Many American workers who put in more than 40 hours a week over the years learned a hard lesson about the numerous exemptions to the law requiring time-and-a-half for overtime pay. Millions of employees in all types of jobs have not been able to collect the overtime premium because of their salary level or the nature of their work. Now, the federal government is adjusting the relevant regulations in a way that allows millions of previously denied workers to qualify for overtime pay.
The recent announcement by the U.S. Department of Labor regarding the final rule on overtime pay eligibility for salaried workers in executive, administrative or professional industries is set to have a significant impact on millions of employees in the United States. Under the new rule, approximately four million workers will become eligible for overtime pay, with the changes being implemented in two stages.
One adjustment is that the standard salary levels for exemption from overtime pay will increase from $684 per week to $844 per week starting July 1. This means that workers earning $43,888 per year would be eligible for mandatory overtime. Overall, about one million people who previously not eligible for guaranteed time-and-a-half because they earned too much now must be given the overtime premium.
The second phase of the rule change will take effect on January 1, 2025, affecting an additional three million workers. Under this new methodology, the standard salary level will be set to the 35th percentile of full-time salaried workers in the lowest-wage census region, which is currently the South. This will result in an exempt salary level of $1,128 per week ($58,656 per year), with adjustments to the threshold scheduled for every three years starting in 2027.
This final rule is aimed at ensuring that more salaried workers receive fair compensation for doing extra work, particularly in industries where long hours and additional responsibilities are common. By increasing the salary thresholds for overtime exemption, the Department of Labor seeks to provide greater financial security for employees and protect their rights.
After many years without a change, the final rule on overtime pay eligibility represents a significant step towards promoting fair labor practices and protecting workers’ rights in the United States. If you’re unsure about how the new rules affect you or believe you have been unfairly denied overtime, speaking with a Georgia wage and hour law attorney will help you decide how to proceed.
At The Reddy Law Firm, P.C., we represent clients in overtime pay disputes and other employment law matters. Please call 678-629-3246 or contact us online to talk about your options with an accomplished lawyer. Our office is in Alpharetta.
