The first increase in the U.S. Department of Labor's (DOL) new Overtime Final Rule is scheduled to take effect TODAY.
Late last week, a federal judge issued a temporary restraining order specifically for the State of Texas as an employer, meaning the first phase of the DOL Overtime Rule will go into effect as announced today. This decision temporarily exempts the State of Texas from the rule's implementation, however, businesses in the rest of the country will still need to comply. The Restaurant Law Center (RLC) and the American Hotel & Lodging Association (AHLA) are part of a coalition challenging the rule and are analyzing their options now on behalf of our members given the ruling. More updates will follow.
Overview of the Final Rule:
Standard Salary Threshold Increase: Effective July 1, 2024, the standard salary threshold will increase to $844 per week ($43,888 annually). It will rise again on January 1, 2025, to $1,128 weekly ($58,656 annually).
Highly Compensated Employee (HCE) Threshold Increase: The salary threshold for HCEs will be $132,964 annually starting July 1, 2024, and will increase to $151,164 on January 1, 2025.
Automatic Updates: Starting July 1, 2027, the earnings thresholds will be automatically updated every three years based on wage data.
What You Should Do Now:
Review Job Duties: Ensure employees are correctly classified as exempt or non-exempt based on their job duties.
Review Payroll Records: Identify salaried exempt employees with wages below the new threshold. For these employees, you might consider 1) Raising their salary above the new limit or 2) Changing their status to non-exempt and properly tracking hours to pay overtime when appropriate.
Consult Counsel: Consult with an employment attorney licensed in SC to determine how best to comply with the Final Rule and all applicable state and local rules.
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