More Salaried Workers Eligible for Overtime Pay | What Steps to Take Now
Published on by Alex Finn in Manufacturing

If you think you know which of your employees is exempt from overtime pay, it’s time to take another look. The Fair Labor Standards Act’s overtime pay requirements significantly changed this summer thanks to the U.S. Department of Labor’s (DOL) new rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. Effective July 1, 2024, more salaried workers are eligible for overtime pay due to an increase in the minimum salary threshold for exempt employees.
Who’s exempt from receiving overtime pay under the final rule?
For employees to be exempt from receiving overtime pay under the final rule, they must generally be paid a salary, be paid at least a specific weekly salary level, and primarily perform executive, administrative, or professional duties (“EAP”).
Beginning July 1, 2024, the new rule raises the EAP exemption salary threshold from $684 per week to $844 per week. For highly compensated employees (HCEs), the annual compensation level to be exempt from overtime pay will increase from $107,432 to $132,964. On January 1, 2025, the EAP exemption threshold will increase to $1,128 per week, and the HCE exemption threshold will increase to a compensation level of $151,164. These eligibility thresholds will be updated every three years beginning July 1, 2027, based on current wage data.
Repercussions for non-compliance
Employers can face some serious repercussions if they are not in compliance with the DOL’s final rule, including civil penalties, criminal prosecution, unpaid overtime liability, and state-specific penalties.
Steps to take now
To ensure your organization is in compliance and avoid facing these repercussions, employers should review their practices, adjust salaries, and ensure accurate classification to mitigate risks. If you discover a misclassification issue related to the final rule, it’s important to correct it as soon as possible.
Explore additional resources
You may also be interested in Top 10 Tips for Recruiting and Retaining Manufacturing Talent, or in our latest Manufacturing Compensation & Benefits Benchmarking study, featuring new data from manufacturers of all sizes across our region. You can also find out why AI represents a greater opportunity for smaller manufacturers than for many of their larger counterparts.
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