The Fair Labor Standards Act (FLSA) has undergone a significant update regarding overtime regulations, impacting both employers and employees across the United States. Note, these changes do not impact Independent Contractors. Here’s a breakdown of the new overtime rules and their enforcement:
The Salary Threshold Increase:
The most prominent change concerns the salary threshold used to determine overtime eligibility. Previously, employees earning over $684 per week were exempt from overtime pay. This threshold has been significantly raised to $844 per week (roughly $21.10 per hour on a 40-hour work week), effective July 1, 2024. This means more workers will be eligible for overtime pay, as their salaries no longer automatically qualify them for exemption.
The threshold will automatically adjust every three years to account for inflation. This ensures that the overtime eligibility stays relevant and adjusts to changing economic conditions.
What it Means:
Employers need to carefully review their workforce and identify employees whose salaries fall below the new threshold. These workers will now be eligible for overtime pay if they work more than 40 hours in a week.
For many employees, this change signifies an increase in potential earnings. Those who work overtime will now be entitled to the appropriate overtime pay, boosting their income. This can be particularly impactful for low-wage workers who often work long hours. Additionally, the automatic adjustment of the threshold ensures that overtime eligibility remains relevant and adapts to inflation, protecting the value of overtime pay over time.
Enforcement and Resources:
The U.S. Department of Labor (DOL) is responsible for enforcing the FLSA and its overtime provisions. Employees who believe they are not receiving proper overtime pay can file complaints with the DOL’s Wage and Hour Division. The DOL offers various resources and tools to help employers and employees understand the new overtime rules:
- Wage and Hour Division website: https://www.dol.gov/agencies/whd
- Fact sheets and guidance on overtime: https://www.dol.gov/agencies/whd/overtime
- Helpline for overtime and other FLSA related questions: 1-866-4US-WAGE (1-866-487-9243)
