In a new ruling, the U.S. Labor Department recently announced that millions of employees in America will now become eligible for overtime pay. Starting July 1, 2024, any salaried worker who earns less than $43,388 annually will qualify for 1.5 times their pay if they put in more than a 40-hour workweek. This is an increase from the current threshold of $35,568 every year.
This new ruling marks the biggest change to the overtime pay threshold in several decades. And next year, this threshold will expand again. As of January 1, 2025, any salaried workers who make less than $58,656 will be eligible for overtime pay at 1.5 times their normal rate if they exceed 40 hours worked in a week.
The main workers who will benefit from this new ruling are those who work in low-wage positions that are still salaried. Many of these employees include those working in healthcare, finance, hospitality, and retail. In fact, an analysis of this updated rule by the Economic Policy Institute discovered that, thanks to this new ruling, over 4.3 million more workers will become eligible for overtime pay.
The Labor Department has plans to update the thresholds for overtime eligibility every three years from this point out, using current wage data. At Balanced Bookkeeping of NC, we recognize that this overtime ruling could impact the wages you pay your employees and your payroll operations. To learn more about how this ruling could affect your business and find out how you can navigate this change successfully, contact us today.
