Are you ready to grow your business? Contact Us
Book a Consultation

DOL’s Two-Stage Overtime Rule Presents New HR Challenges

Your HR > Entrepreneurs > DOL’s Two-Stage Overtime Rule Presents New HR Challenges
07Jun
Department of Labor
Paul SackettEntrepreneurs

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)​.

author avatar
Paul Sackett
With 30 years of experience in HR, my career began in an unexpected place—sales. Armed with a degree in Public Relations, I spent my early years in Advertising Sales, working across radio and newspapers. My journey took a pivotal turn during a sales training program, where I was introduced to the world of HR. Though unfamiliar with it at the time, I quickly found my calling and have been passionate about the field ever since.
See Full Bio

With 30 years of experience in HR, my career began in an unexpected place—sales. Armed with a degree in Public Relations, I spent my early years in Advertising Sales, working across radio and newspapers. My journey took a pivotal turn during a sales training program, where I was introduced to the world of HR. Though unfamiliar with it at the time, I quickly found my calling and have been passionate about the field ever since.