07Jun

Department of Labor’s Overtime Regulations under FLSA

Employers now face a strategic decision with the Department of Labor’s (DOL) final rule updating overtime regulations under the Fair Labor Standards Act (FLSA). This new rule, effective in two phases, significantly increases the salary thresholds for exempt employees, introducing complex compliance challenges.

Effective July 1, 2024, the salary threshold will increase from the current $35,568 to $43,888. Then, on January 1, 2025, it will rise again to $58,656. Employers need to decide whether to comply with these thresholds incrementally or adopt the higher 2025 threshold immediately.

Ellen McLaughlin, partner at Seyfarth Shaw, emphasized the potential difficulties for employers, suggesting that handling both increases simultaneously might simplify compliance and minimize disruptions​ (Alston & Birdhttps://www.alston.com/en/insights/publications/2024/04/dol-issues-final-rule-amend-overtime-regulations)​​ (HRPolicy https://www.hrpolicy.org/insight-and-research/resources/2024/hr_workforce/public/04/dol-final-overtime-rule-to-take-effect-july-1/ )​. Rebecca Rainey from Bloomberg Law pointed out that the first increase aligns with past methodologies, potentially facing fewer legal challenges than the second increase​ (HRPolicy)​.

Employers must review and adjust the compensation of employees earning between the old and new thresholds. This process includes reviewing budgets, reclassification logistics, and training managers and employees on new timekeeping policies​ (HRPolicy)​.

Furthermore, the rule includes an automatic update mechanism starting in 2027, aligning the threshold with current economic conditions. This aspect raises concerns about future predictability for employers​ (Alston & Bird)​.

Given the anticipated legal challenges, similar to those faced by the 2016 Obama-era rule, it is crucial for employers to stay informed and prepared for these regulatory changes​ (Alston & Bird)​​ (HRPolicy)​.

For more information or assistance with these updates, feel free to contact YourHR at https://www.yhrexperts.com #OvertimeRule #DOL #FLSA #HRCompliance #EmploymentLaw #HRStrategy #WorkplacePolicy #YourHR

For detailed insights, refer to resources from Alston & Bird and HR Policy Association​ (Alston & Bird)​​ (HRPolicy)​.