New Federal Overtime Rule for Employers

New Federal Overtime Rule for Employers

The federal Fair Labor Standards Act (FLSA) guarantees minimum wages and overtime pay at a rate of not less than one and one-half times the employee’s regular rate for hours worked over 40 in a workweek.

Some workers are specifically exempt from the FLSA’s minimum wage and overtime protections, including bona fide executive, administrative or professional employees. This exemption, typically referred to as the “EAP” or “white collar” exemption, applies when:

  1. An employee is paid a salary,
  2. The salary is not less than a minimum salary threshold amount, and
  3. The employee primarily performs executive, administrative or professional duties.

On April 23, 2024, the Department of Labor, Wage and Hour Division (DOL) issued new FLSA regulations revising this exemption from minimum wage and overtime pay.

In particular, the new rules change the minimum salary amounts, as follows:

Starting July 1 of this year, most salaried workers who earn less than $844 per week ($43,888 per year) will become eligible for overtime pay under the final rule [the current minimum is $35,568].

Starting Jan. 1, 2025, most salaried workers who make less than $1,128 per week ($58,656 per year) will become eligible for overtime pay.

The rule will also increase the total annual compensation requirement for highly compensated employees (who are not entitled to overtime pay under the FLSA if certain requirements are met) from $107,432 per year to $132,964 per year on July 1, 2024, and then set it equal to $151,164 per year on Jan. 1, 2025.

Understand the New Rules 

It is important to understanding the details and definitions of the rules and how they will be put into practice along with deadlines for compliance.  The rules can be found here.

Supplemental information is available at the links provided below:

Develop Your Newspaper’s Plan

Members should start planning around the rules such as pay analyses to determine if any exempt employees are affected and how to comply with the new rules, including alternatives such as a pay raise or transfer to nonexempt status with overtime pay.

There are provisions of the FSLA that apply specifically to newspaper employees and will affect this analysis.

For example, employees of some smaller newspapers are exempt from the overtime law. Namely, section 13(a)(8) exempts “any employee employed in connection with the publication of  any weekly, semiweekly, or daily newspaper with a circulation of less than four thousand the major part of which circulation is within the county where published or counties contiguous thereto.”

Further, keep in mind that generally “inside” salespeople are not exempt from overtime pay laws and therefore entitled to such payment. On the other hand, “outside” salespeople that meet certain requirements are usually exempt and not entitled to overtime.

As for journalists and reporters, they may qualify for the creative professional exemption if their primary duty is work that requires imagination, originality, talent, or invention in a recognized artistic or creative field. If they are treated as exempt from overtime as professionals, again, the new rules increase the salary threshold for such exemption, as noted above. https://www.dol.gov/agencies/whd/fact-sheets/17q-overtime-journalists

The new rules will probably be challenged in court and may ultimately be set aside (as similar rules were during the Obama administration), but planning by members is still a good idea, assuming the rules affect them.