Dive Transient:
- The U.S. Division of Labor mentioned Tuesday it is going to publish a last rule elevating the Truthful Labor Requirements Act’s minimal annual wage threshold for extra time pay eligibility in a two-step course of. Beginning July 1, the edge will enhance from $35,568 to $43,888 per yr. It’s going to then enhance to $58,656 on Jan. 1, 2025.
- The modifications will broaden extra time pay eligibility to tens of millions of U.S. staff, the company mentioned. DOL’s 2025 threshold represents a bounce of about 65% from the Trump administration’s 2019 rule and is barely larger than the $55,068 mark that DOL proposed in 2023.
- The edge will robotically replace each three years utilizing present wage knowledge — which might subsequent happen on July 1, 2027 — however DOL mentioned within the proposed rule that updates could also be quickly delayed if the division chooses to interact in rulemaking to alter its methodology or replace mechanism.
Dive Perception:
The rule represents one more regulatory replace for employers, following DOL’s impartial contractor last rule and the U.S. Equal Employment Alternative Fee’s being pregnant lodging rule. The extra time rule cleared White Home assessment weeks in the past, although, and one supply informed HR Dive on the time that its publication was anticipated at any second.
The FLSA’s extra time exemption applies to staff employed as bona fide govt, administrative, skilled and outdoors gross sales staff, in addition to some laptop staff.
The primary a part of the rise scheduled for July 1 follows the method for wage-threshold will increase established within the 2019 rule, Jessica Looman, administrator of DOL’s Wage and Hour Division, mentioned throughout a press name Tuesday. This technique is predicated on the twentieth percentile of weekly earnings of full-time salaried staff within the lowest-wage U.S. Census area, whereas the January 2025 enhance makes use of an up to date methodology that’s based mostly on the thirty fifth percentile.
The primary enhance in July 2024 is predicted to have an effect on roughly 1 million staff, Looman mentioned, whereas the second enhance in January 2025 is predicted to have an effect on roughly 3 million staff.
A separate extra time exemption applies to sure extremely compensated staff. For these staff, DOL’s rule will enhance the minimal wage threshold to $132,964 on July 1, and to $151,164 on Jan. 1, 2025, Patrick Oakford, deputy assistant secretary for coverage at DOL, mentioned throughout the press name.
In all, the division mentioned it thought of greater than 33,000 public feedback on the proposed rule. A type of got here from the Society for Human Useful resource Administration, which requested the company to delay the ultimate rule’s efficient date to 2025. SHRM mentioned {that a} 60-day interval between publication and efficient date is inadequate for employers to evaluate and adjust to the rule.
“This rule will restore the promise to staff that for those who work greater than 40 hours in every week, you have to be paid extra for that point,” Appearing Secretary of Labor Julie Su mentioned in a press launch. “Too typically, lower-paid salaried staff are doing the identical job as their hourly counterparts however are spending extra time away from their households for no extra pay. That’s unacceptable.”
Observers now flip to the federal courts, the place challenges to the rule are anticipated. In September, a choose for the U.S. District Courtroom for the Western District of Texas rejected one try to strike down the 2019 rule through which an employer claimed that DOL lacked the statutory authority to difficulty it.
The authorized struggle additionally could carry over to Congress, the place a Republican consultant from Missouri has launched a invoice that will block the brand new last rule. The invoice has not but obtained a committee vote.
Within the meantime, employer-side attorneys who beforehand spoke to HR Dive mentioned employers can decide which positions could be affected by the up to date threshold, and whether or not to transform affected staff to hourly, nonexempt standing and pay extra time, or increase pay to place them over the edge.
