Major Changes in Federal Overtime Rules

Effective July 1, 2024, new salary thresholds will go into effect that will impact eligibility for exemptions from overtime.  Affecting the exemptions for executive, administrative, and professional employees, the salary threshold will be raised to $844 per week (annualized $43,888).  Respectively, those thresholds are now $684 per week, $35,568 per year. 

To be eligible for one of these exemptions from overtime, the employee‘s position must be salaried (not hourly), the position must be paid the minimum salary set by the United States Department of Labor (DOL), which is responsible for the imminent increase in the threshold, and the duties assigned to the position must meet the requirements for one of the listed exemptions.  The only change taking place in these requirements on July 1st is the threshold salary required to qualify for the three exemptions mentioned.  There is no change in the computer employee exemption or in the outside sales exemption.

Then effective January 1, 2025, the salary minimum will increase again, to $1,128 per week, $58,656 per year for executive, administrative, and professional employees.  These are large increases coming in rather quick succession.  Failure to comply will result in currently exempt salaried employees becoming eligible for overtime compensation.

Another change that is coming is in the Highly Compensated Employee (HCE) Exemption.  The current threshold for this exemption is $107,432 per year.  On July 1, 2024, the threshold will increase to $132,964 per year, and on January 1, 2025 the threshold will increase again to $151,164 per year.

If you have questions or if you would like additional details about these exemptions or any other issue in wage and hour law, contact Joe Austin at or call him at 252-229-1522.