The rules for who is paid overtime have just been changed by The Department of Labor.
This matters to you if you or someone you know is an employee. This matters to you if you own a business and pay payroll.
There are specific rules regarding which employees are exempt from overtime pay. Employees are often exempt from the rules forcing the employer to pay overtime and time and a half if they are employed in a bona fide executive, administrative, or professional (EAP) capacity.
1/1/20 – 6/30/2024 the EAP employee could only be exempt from overtime pay if their annual salary was $35,568 or more per year.
On 7/1/2024 this annual salary increases to $43,888 per year.
On 1/1/2025 this annual salary increases to $58,656 per year. This is a very significant increase.
Further these thresholds will be increased once every three years.
What this means is roughly four million more workers will be required to be paid overtime pay when they work more than 40 hours per week at time and a half, unless their annual salaries are increased above the thresholds listed above!
If we handle your payroll and you wish to discuss this with us, please reach out to the partner overseeing your account!
Mike Sylvester, CPA
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