The New Overtime Rule is Going into Effect: Steps to Take for Employers
The new overtime rule under the Fair Labor Standards Act (FLSA) is going into effect, and employers must ensure that their workplaces follow it.
The increased salary thresholds for overtime exemptions occur in two phases. The first phase occurred when the threshold increased to $844 per week ($43,888 per year) on July 1, 2024. The second phase will occur when the threshold increases to $1,128 weekly ($58,656 per year) on January 1, 2025.
The FLSA also applies equally to full-time and part-time workers.
The biggest takeaway for employers is that FLSA litigation continues to rise, and the changes have made it more difficult to classify workers as exempt. Position classifications and salary decisions are increasingly scrutinized for transparency and equity, and using artificial intelligence tools in human resources can narrow judgment in making these decisions.
As a result, employers need to ensure that they are familiar with the bounds of the new rule, understand how it applies to their existing workforce and job classification system, and determine whether the change in the law warrants reclassifications of existing jobs.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship.
For more information on this and other topics, please contact Kevin via any of the channels listed below:
📧 kevin@kmckernan.com | 📞 718-317-5007