Labor Department Finalizes New Overtime Salary Requirements
The U.S. Department of Labor (DOL) issued a final rule significantly increasing the salary level for determining overtime pay requirements for certain salaried employees.
Effective July 1, 2024, the salary threshold will increase the annual salary level from $35,568 to $43,888, and then to $58,656 on Jan. 1, 2025, marking a nearly 65% increase from the current salary threshold.
Additionally, beginning July 1, 2027, salary levels will update every three years using up-to-date wage data.
Under the Fair Labor Standards Act, salaried workers classified as executive, administrative, professional, outside sales and computer employees are exempt from overtime pay requirements if a worker earns at or above a defined salary level called the “standard salary.” Under the final rule, salaried workers — which often include construction supervisors — earning less than the finalized standard salary levels per year will be eligible to receive the standard overtime rate for hours worked over 40 in a workweek.
NAHB submitted comments when DOL issued the proposed rule in late 2023, citing the negative impact such a significant increase would have on housing affordability, among other concerns. Additionally, during multiple DOL listening sessions, NAHB members questioned the timing of a salary level update, as the latest update went into effect less than five years ago.
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