Overtime pay, which is regulated under the Fair Labor Standards Act (“FLSA”), has been a mainstay to ensure that workers are compensated for working over 40 hours per week for over 85 years.
The FLSA establishes minimum wage, overtime hours worked and record keeping requirements, and protections.
As to overtime, “EPAs,” who generally are executive, administrative, and professional employees, are exempt from FLSA protections.
These employees, who must be paid via salary or fee, currently must be paid over $684 per week to be exempt.
That changes June 1.
In the biggest change to the FLSA salary threshold since 1975, the Department of Labor announced that, starting June 1, 2024 the minimum salary threshold for exempt employees will increase in two stages.
Starting July 1, 2024, the minimum salary threshold will increase from $684 to $884 per week. This means that employees with current annual salaries of up to approximately $44,000 may now be eligible for overtime compensation.
Beginning January 1, 2025, the salary threshold will increase to $1,128 per week or $58,656 annually.
These changes could impact up to four million employees.
Automatic updates to these salary thresholds will begin in 2027.
These automatic updates will be calculated utilizing then-current wage data.
These changes may very well be challenged in court.
Litigation has followed prior FLSA changes.
Nonetheless, employers should prepare to comply with the new thresholds and accurately determine which employees must be paid overtime.
These calculations should be made before the 2024 and 2025 changes, and periodic recalculations should always be made.
Employers should identify impacted employees, calculate potential overtime, and be prepared to implement appropriate payroll changes and record keeping requirements starting July 1 of this year and January 1, 2025.
Contact your FOS attorney for guidance regarding the revised FLSA thresholds
