DOL Aiming for April 2024 Implementation of Overtime Rule

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Date: April 12, 2024

Employers need to start preparing for compliance.

The Unified Agenda of Federal Regulatory and Deregulatory Actions is a semiannual report detailing regulations under development by federal agencies. It is published each spring and fall.

The government’s fall regulatory agenda has been released. Key updates include planned changes to overtime regulations, expected in April 2024.

The Department of Labor (DOL) plans to finalize updates to the executive, administrative, and professional exemptions for overtime pay under the Fair Labor Standards Act. The changes include:

• Raising the salary threshold for overtime exemptions from $684 per week ($35,568 annually for a full-year worker) to $1,059 per week ($55,068 annually for a full-year worker). This is based on the 35th percentile of full-time salaried workers' earnings in the lowest-wage census region.
• Increasing the salary threshold for highly compensated employees from $107,432 annually to $143,988 annually, based on the 85th percentile of full-time salaried workers' earnings nationally.
• Automatically updating all salary thresholds every three years.

These significant increases mean employers may need to adjust many employees' salaries to either meet the new threshold or reclassify them as nonexempt, which would require paying overtime.

These changes could be costly for businesses and may have nonmonetary impacts on employees earning between the current and proposed thresholds.

With the public comment period closed as of November 7, 2023, the DOL plans to move quickly through the regulatory process. Employers should begin preparing for potential changes to compensation plans.

Now is the time for employers to start planning for these impactful changes.