The Department of Labor has increased the minimum salary threshold which makes workers eligible for overtime pay. Employees covered by the Fair Labor Standards Act are entitled to at least one-and-a-half times their rate for hours worked beyond the 40-hour workweek, unless they are exempt.

Previously, those exemptions included salaried employees primarily performing “executive, administrative, or professional duties” and making $35,568 per year or more. Now, that minimum salary threshold has increased to $43,888 per year and will increase even further to $58,656 on January 1, 2025.  

Additionally, already in effect, the minimum salary for highly compensated employees—another exempt group — jumped from $107,432 per year to $132,964, and will increase again on January 1 to $151,164 per year.  

The rule is expected to impact more than four million workers, according to the DOL.  

Starting “July 1, 2027, these earnings thresholds will be updated every three years so they keep pace with changes in worker salaries.”  

Legal challenges between now and then could affect whether the January 1 changes go into effect, but employers are urged to be prepared to make changes depending on how litigation progresses.