New Overtime Pay Rules: Here's What You Need To Know

Small Biz Ahead

Episode Notes

Key Highlights

What Business Owners Need To Know About The New Overtime Rules

The Department of Labor has officially changed overtime rules for employers starting on July 1, 2024. Here’s what you need to know:

• Prior to July 1, 2024, you didn’t have to pay employees for overtime if they made more than $35,568 a year. After July 1, 2024, the new rule increases that salary threshold to $43,888. Now, any employees who make $43,888 or less a year will qualify for overtime pay. They must also meet other requirements like being a salaried employee and they’re not supervising anyone.
• This number will significantly increase again starting on January 1, 2025. On that day, the salary amount goes up to $58,656. This means that if you have any salary employees who aren't supervising anyone, their job duties fit the necessary description, and they make less than $58,656 a year, you are going to owe them overtime.
• In Texas, a federal court has challenged and suspended this ruling. If you’re a business owner in Texas, it’s recommended that you speak with a labor attorney to make sure your employees are classified the correct way.
• Some companies are starting to enact strict overtime rules, while others are adjusting their employee’s status from a salaried worker to hourly worker.
• Be sure to comply to these new rules because if you’re not in compliance, your employees could sue your business for wage theft.

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