On April 26, 2024, the Department of Labor’s Wage and Hour Division (DOL) issued a final rule that will increase the minimum salary threshold for the “white collar” overtime exemption under the Fair Labor Standards Act (FLSA) from $35,568 to $58,656 per year. To be exempt from overtime pay under this provision, workers must be paid a salary of at least $58,656 and must also meet certain job duties for executive, administrative, and professional employees. Workers with a salary below this salary threshold must be paid overtime if they work more than 40 hours a week.
DOL released the following implementation schedule for the final rule:
| Compliance Date | Salary Level | Salary Level Percentile or Calculation |
| Current | $35,568 per year $683 per week | 2019 Final Rule- 20th percentile of weekly earnings in lowest wage region (South) and retail industry, with 2019 data. |
| July 1, 2024 | $43,888 per year $844 per week | 2019 Final Rule methodologies with updated 2024 wage data. |
| January 1, 2025 | $58,656 per year $1,128 per week | 35th percentile of weekly earnings in the lowest wage region (the South) |
| July 1, 2027 | Will be calculated in 2027 and recalculated every 3 years. DOL will provide notice not fewer than 150 days before each future update. | 35th percentile of weekly earnings in the lowest wage region (the South) |
Advocacy submitted a comment letter on this proposed rule, stating that DOL’s analysis was deficient because it underestimated the economic impact of this rule on small entities. Small entities commented that this rule will have detrimental impacts on their operations and increase their payroll. Advocacy recommended that DOL reassess the compliance costs of this rule in a supplemental analysis and consider adopting significant alternatives like a lower salary threshold.
- Read the DOL’s final rule.
- Read the DOL’s press release and FAQ.
- Read the DOL’s Small Business Compliance Guide.
- Read Advocacy’s comment letter on the proposed rule.
Advocacy contact: Send an email to Janis Reyes at Janis.Reyes@sba.gov.