Beginning in July, many more American workers will become eligible for overtime pay not previously allowed under the Fair Labor Standards Act (FLSA). In April, the U.S. Department of Labor (DOL) announced that revisions to the FLSA will raise the salary cap, allowing previously excluded administrative, professional, and executives to receive overtime pay.

Currently, the FLSA federally mandates overtime pay for hourly employees working over 40 hours per week but excludes most salaried employees, despite the fact that many lower-earning salaried workers perform the same duties as their hourly counterparts. Revisions to overtime thresholds also fulfill President Joe Biden’s campaign promise to make all hourly and salaried workers eligible for overtime pay during his administration.

When Does the New Rule Take Effect?

In addition to extending overtime thresholds to include more salaried employees, the DOL also finalized proposed changes that better defined “highly compensated employees” and total annual compensation requirements. Key revisions and salary threshold increases will take effect for both categories of workers on the following dates:

  • July 1, 2024: Minimum weekly salaries for lower-earning employees will increase from $684 to $844 per week, and annual salaries for highly compensated employees will increase from $107,432 to $132,964.
  • January 1, 2025: Minimum weekly salaries will again increase from $844 per week to $1,128 per week for lower-earning employees, and annual salaries from $132 964 to $151 164 for highly compensated employees.
  • July 1, 2027: The first automatic update to earning thresholds to reflect current wage data will take effect and continue every three years thereafter.

How Will Employers Be Impacted?

With July rapidly approaching, employers must quickly determine whether their currently exempt employees must be reclassified as non-exempt or increase employee salaries to meet the new thresholds, whichever is more financially economical.

At both the federal and state levels, the DOL is enforcing wage and hour laws more aggressively, further evidenced by the shortened 60-day notice instead of the previous 90-day period for previous changes, putting pressure on employers to ensure compliance. Employers have limited time to:

Consider tracking employees’ hours through July 1st to determine the more cost-effective method of addressing employees whose earnings fall below the new thresholds, such as pay raises versus overtime pay.

Ensure that employee exemptions meet duties test requirements, which are still in effect and must be met.

Implement review periods to reevaluate exempt employees’ status at a minimum of every three years.

In New Jersey, state overtime exemptions will automatically change to reflect the revised FLSA regulations, and misclassified exempt employees under the new FLSA regulations will also be exempt under New Jersey Minimum Wage and Overtime Laws. Federally, misclassification can result in substantial penalties and damages, including attorneys’ fees, with even greater state penalties and damages.

Our Marlton Employment Lawyers at Burnham Douglass Handle Overtime Pay Disputes

Revisions to the FLSA expand overtime thresholds to include a broad group of salaried employees previously exempt. If your employer is failing to pay for your overtime hours, our Marlton employment lawyers at Burnham Douglass will help you assert your rights and seek compensation. Call today at 856-751-5505 or contact us online to schedule a free consultation. Located in Marlton and Northfield, New Jersey, we serve clients in South Jersey, including Evesham Township, Cherry Hill, Camden County, Burlington County, and Atlantic City.