The U.S. Department of Labor recently issued a final overtime rule raising the salary threshold for overtime exemptions (i.e. executive, administrative, professional and certain computer-related roles) under the federal Fair Labor Standards Act (FLSA). Effective July 1, 2024, the final rule increases the salary threshold for exempt workers from $684 per week ($35,568 annually) to $844 per week ($43,888 annually) beginning July 1, 2024.
The threshold will increase again on Jan. 1, 2025 to $1,128 per week ($58,656 annually). In addition, beginning July 1, 2027, the salary thresholds will update every three years to account for national wage fluctuations.
What does this mean for county governments?
Workers who are currently exempt from being paid overtime wages will no longer be exempt from overtime wages if their salary is less than $844 per week beginning July 1, 2024. That means that more employees could be eligible for overtime wages, which would increase payroll costs for counties.
Although the increase in the salary threshold could be delayed through court challenges, counties should:
- Review the exempt status of employees and determine which employees will be affected by this final overtime rule (i.e., those who make less than $844 as of July 1 or $1,128 per week as of Jan. 1);
- Prepare to increase compensation or change exempt classification by July 1, 2024, for employees affected by the initial salary threshold increase (up to $844 per week); and
- Prepare to increase compensation or change exempt classification by Jan. 1, 2025 for employees affected by the additional salary threshold increase (up to $1,128 per week).
Additional resources
U.S. Department of Labor – Restoring and Extending Overtime Protections
U.S. Department of Labor – FAQs
