US overtime pay rule now in effect

In the United States, the Department of Labor’s (DOL) final rule altering overtime regulations under the Fair Labor Standards Act has now come into effect.

NDA logo 2019 web index

As it currently stands, the DOL’s rule establishes two-tiered increases to the minimum salary threshold and the threshold for highly compensated employees (HCE), as well as automatic updates to both thresholds.

By January 1, 2025, the minimum salary threshold for covered salaried employees to be exempt from overtime requirements will rise from US$35,568 to $58,656 per year.

For highly compensated employees, the salary threshold will rise from $107,432 to $151,164. The final rule increases the current thresholds by 60% and 71%, respectively.

While there are multiple lawsuits against the Department’s overtime rule currently working their way through the legal system, no nationwide injunction to block the final rule has been issued thus far.

The US National Demolition Association has said that it will keep members updated should the status of the overtime rule change in the coming weeks.

Last year, the NDA submitted comments to the DOL opposing the drastic increases to the minimum salary thresholds and automatic updates that do not take into account current economic conditions.

The NDA is also advocating for legislation in Congress to overturn the overtime rule given its impact on employers and workers.

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The DOL Overtime Rule:

On July 1, 2024, the DOL updated the standard salary level using the existing methodology from the 2019 final rule and current data, raising the salary level from $684 per week to $844 per week (equivalent to $43,888 per year).

For highly compensated employees, also following the 2019 methodology, the annual compensation level to be exempt from overtime pay increased from $107,432 to $132,964.

On January 1, 2025, DOL will implement a new salary methodology, setting the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (the South), resulting in a salary level of $1,128 per week (equivalent to $58,656 per year).

For highly compensated employees, the compensation level will be set at the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally, resulting in a compensation level of $151,164.

Future updates to the salary and compensation levels will occur every three years and will apply up-to-date wage data to the salary and compensation methodologies in the regulations at the time of the update. The next three-year update will take place on July 1, 2027.

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Leila Steed Editor, Demolition & Recycling International Tel: +44(0) 1892 786 261 E-mail: [email protected]
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