Big changes to overtime pay rules are on the horizon, as the US Department of Labor prepares to implement new regulations that will expand eligibility for overtime compensation.

Starting this summer, millions of workers in New York and across the United States will have the potential to qualify for overtime pay, a welcome change for many employees.

Under the current guidelines of the Fair Labor Standards Act (FLSA), hourly or non-exempt employees who work more than 40 hours a week are entitled to receive overtime compensation at a rate of 1.5 times their regular pay.

At present, certain exemptions are in place for salaried workers who earn above a specific threshold. The upcoming overtime pay changes will broaden the scope of eligibility, allowing more people access to overtime pay.

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Previous Overtime Pay Thresholds

Currently, employees who earn a fixed amount of over $35,568 per year ($684 per week) are exempt from the FLSA's overtime regulations. These individuals typically perform executive, administrative, or professional duties, as defined by the Department of Labor.

New Overtime Pay Thresholds

The first wave of changes is set to take effect on July 1. After this date, workers earning $43,888 or less per year (about $844 per week) will be eligible for overtime pay. The Department of Labor will implement these updated regulations under section 13(a)(1) of the FLSA.

Future Overtime Pay Adjustments

The threshold for overtime eligibility is scheduled for another increase on January 1, 2025. From this point onward, employees making under $58,656 per year (or $1,128 per week) will qualify for overtime pay. Additionally, further adjustments will occur every three years, with the threshold being revised based on current earnings data.

The Department of Labor estimates that these changes to the overtime pay rules will extend overtime eligibility to an additional 1.3 million people who were previously excluded from overtime protection.

The change is also expected to provide up to $1.5 billion in additional earnings for workers over the next decade. While some employers may be concerned about the added costs of overtime pay, supporters of the new rules argue that they will ensure fair compensation for workers and boost employee morale.

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