Millions more salaried US workers are set to be eligible for overtime pay starting July 1

02 Mar Millions more salaried US workers are set to be eligible for overtime pay starting July 1

Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. As a result of the final rule, the minimum salary required for certain employees to be classified as exempt from overtime under federal law increased on July 1, 2024, and will again on January 1, 2025. So, if your employee is both salaried and classified as exempt, they are not entitled to overtime pay. But there are situations where salaried employees would be eligible for overtime pay—and as an employer, it’s important to understand the relevant overtime rules and when you need to be paying for overtime hours.

Complying with new minimum salary requirements

The law covers salaried workers who earn below certain thresholds, and it will kick in through two phases. “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” she said. SHRM members have access to additional overtime rule resources, including implementation toolkits, example policies, how-to guides and more. The Biden administration first announced plans for its new rule in late August, and submitted a proposal in September. The Labor Department said it “conducted extensive engagement with employers, workers, unions and other stakeholders” and considered more than 33,000 comments as it developed the final rule. The Department of Labor’s new final rule will phase in the updated salary threshold in two steps over the next eight months, and automatically update it every three years thereafter.

• Allowances paid as reimbursement of expenditure actually incurred on account of posting of workers, such as expenditure on travel, board and lodging, shall not be regarded as part of the wage pursuant to the Regulations.
• Effective July 1, 2024, the minimum total compensation requirement for the HCE exemption will increase to $132,964 per year, including at least $844 per week that must be paid on a salary or fee basis.
• Additionally, schedules for employees whose salaries are not raised above the new threshold may need adjusting to limit overtime costs.
• If despite your efforts, you are still required to meet those family responsibilities during the overtime period, only then you can refuse overtime.
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Wages – Cleaning workers

• From there, you would multiply their regular rate of pay by 1.5 to get their overtime rate—which, in this scenario, would be $26.25 ($17.50 x 1.5).
• Different workweeks may be established for different employees or groups of employees.
• For example, California has a one-day rest rule that prohibits an employer from requiring an employee to work more than six consecutive days in a workweek.
• For example, Hourly, keeps track of all your team’s hours and calculates pay in real-time.
• The new rule stipulates that only “bona fide” executive, administrative or professional employees are exempt from the expanded OT rule.

The Exemptions from and Modifications to Hours of Work Provisions Regulations (Regulations) list classes of employees, by sector, that are exempt from specified hours of work provisions, or for whom these provisions are modified. As an employee or student intern, your employer must inform you in writing at least 24 hours before a shift how much is overtime pay change or addition. Your employer must also give you 24 hours’ notice before adding or changing a period during which you are scheduled to be on standby or on-call.

What are businesses saying about the new rule?

If you have questions, we recommend having a conversation with an HR expert or legal counsel. Additionally, employers need to understand how to classify employees and stay up to date on changes to the federal overtime rule in the future that could impact their business. Consider how a payroll service provider such as Paychex could alleviate some of the work and give you time back to grow your business. For example, Hourly, keeps track of all your team’s hours and calculates pay in real-time.

Another 3 million earn at least $43,888 annually but less than $58,656 ($1,128 per week). On one hand, the two-part approach gives employers the opportunity to avoid having to implement the entire jump in salary level in a short period, Bare said. On the other hand, many employers won’t want to go through this process twice for the same employees, so practicalities may call for addressing both updates at the same time, she added. The Norwegian Labour Inspection Authority does not consider tips part of the wages, pursuant to the regulations on general application of wage agreement. If the employer reports tips as income and thus includes the tips in the calculation basis for holiday pay, taxes and social security benefits, tips will be considered wages.

The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days. Effective July 1, 2024, the salary threshold will unearned revenue increase to the equivalent of an annual salary of $43,888 and increase to $58,656 on Jan. 1, 2025.

• There are exceptions because not everyone is eligible for overtime pay, including exempt employees.
• The lawsuit states that the rule violates several laws, including the Fair Labor Standards Act, and that proposed changes disregard legal precedent.
• The court found that Texas was likely to succeed in showing that the new rule exceeded the DOL’s rulemaking authority.
• See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees, and for more information on the salary basis requirement.
• These changes, including even higher thresholds than in the proposed rule, leave businesses in a position of having to make decisions about their employees.
• “For employees whose duties fall in a gray area—not comfortably exempt or nonexempt—but who are also impacted by the increased salary threshold, this might be a good time to move them to nonexempt on the basis of the salary threshold increase,” he noted.

Starting July 1, 2027, these earnings thresholds will be updated every three years so they keep pace with changes in worker salaries, ensuring that employers can adapt more easily because they’ll know when salary updates will happen and how they’ll be calculated. If you are eligible, the Fair Labor Standards Act gives you the right to earn overtime pay. This obligation to cover travel, board and lodging expenses only applies to travel in Norway. In the case of freight transport assignments by road involving planned overnight stays, subsistence allowance shall be paid in accordance with the rates at any time approved by the authorities for tax-free subsistence allowance. One-third of the subsistence allowance https://www.bookstime.com/ rate shall be paid for each eight-hour period commenced.