Federal Overtime Rule on its Way to Finalization

The White House Office of Information and Regulatory Affairs (OIRA) completed its review of the updated federal overtime rule on April 10, 2024. Publication of the final rule in the Federal Register is expected any day now, with an effective date likely 60 days after publication.

If the final rule tracks the DOL’s proposed, then the final regulation will increase the minimum salary for exemption for executive, administrative, or professional (“EAP”) employees from $684 per week ($35,568 annualized) to $1,059 per week ($55,068 annualized) and the minimum total annual compensation level for exemption as a “highly compensated employee”—e.g., one who customarily and regularly performs any one or more of the exempt duties or responsibilities of an EAP employee—from $107,432 to $143,988. In addition, if finalized as proposed, the rule would require automatic increases in those thresholds every 3 years.

Other than in states with already-higher minimum salaries for exemption (which include New York for executive and administrative employees, but not professionals) –and absent a successful legal challenge to the new rule–employers will be required to pay most executive, administrative, and professional employees at least $1,059 per week.  Once these rules are finalized, please be sure to check with your payroll provider (such as Forework!) that they are updating the minimum salary requirements for your exempt employees. Failure to do so could result in the loss of the exemption, which would mean that the business would need to pay overtime to those employees it thought were exempt from overtime.