DOL Overtime Rule Goes to Court; Employers: Get Ready for July 1 Deadline!

June 14, 2024
By Chuck White, Vice President of Regulatory Affairs

The U.S. Department of Labor (DOL) recently revised the regulations governing eligibility for overtime pay, specifically raising the annual pay level for certain exempt employees. The current threshold is $35,568 annually ($684 weekly) but will be raised in steps. The first step set for July 1 of this year would raise the threshold payroll to $43,888 annually ($844 weekly), and the second step would happen Jan. 1, 2025, rising to $58,656 annually ($1,128 weekly). There are exemptions from this rule for certain executive, administrative, professional, outside sales, and computer workers. The Department’s FAQs explain these job classes in detail.

Exempt administrative employees must currently meet all three of the following conditions:
● The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate (pre-July 1) not less than $684 per week;
● The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
● The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

It is important to remember that these exemptions apply to “White Collar Workers.” The technicians that actually perform hands-on work are always considered “Blue Collar Workers” and are never exempt from the regulation no matter how highly compensated.

At this time, litigation has been filed in the U.S. District Court for the Eastern District of Texas challenging the DOL’s revisions to the rule. The rule has not been paused by the courts as yet. Employers should review their current policies, job categories, and compensation structures in preparation for the fast-approaching deadline.

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