Architectural Columns

Federal “White Collar” Overtime Exemption is Getting A Raise!


Heads up: the Federal “White Collar” overtime exemption is getting a raise. Specifically, the salary threshold above which an employee no longer qualifies for overtime will go up on July 1, 2024 to $844/week ($43,888 annually). On January 1, 2025, the threshold will rise again to $1,128/week ($58,656 annually). The new rule contemplates automatic increases to the salary threshold every three years.

The salary threshold is one test for determining whether employees are “exempt” from overtime rules (which actually means the employer is exempt from having to pay overtime). To be considered exempt, employees must meet the salary threshold, be paid on a salary basis (which means the amount of pay is predetermined and not subject to deductions if the employee is ready, willing, and able to work), and perform duties consistent with being a bona fide executive, administrative, professional, or outside sales person.

Currently the threshold is at $684/week ($35,568 annually) which cuts out a lot of employees who are making more than minimum wage, but not much more. The July increase won’t have much effect on executives and administrative workers in New York, whose salary threshold is already over $1000/week ($1,124.20 for upstaters, $1,200.00 downstate). But New York professional employees may see a difference.

Expect legal challenges to this rule. And always talk to a workplace rights lawyer in your jurisdiction before making any decisions or claims.

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