Just when employers thought they were on top of the latest labor regulations, the 2024 overtime rule has been overturned—and it’s creating a ripple effect across HR departments and payroll planning. Whether you were mid-transition or just gearing up for the changes, here’s a quick breakdown of what’s happened, what it means, and how to navigate your next steps without missing a beat.
What Was the 2024 Overtime Rule, Anyway?
Earlier this year, there was a major push to raise the salary bar for exempt employees under the Fair Labor Standards Act. The proposal would’ve moved the weekly threshold from $684 to $1,059—a big leap that would’ve changed the classification of millions of jobs. There was also a proposed jump for highly compensated employees, pushing their salary requirement north of $143,000. The idea? Expand overtime eligibility and ensure fair pay for more workers. The reality? A legal block before it could roll out.
The Court Steps In and Hits the Brakes
A federal court in Texas put a stop to the proposed changes, ruling that the salary hikes went too far. In short, the court felt the Department of Labor had overreached its authority. So, the planned increases for mid-2024 and early 2025? Canceled. Employers now remain bound by the original thresholds: $684 per week for most exempt employees and $107,432 annually for highly compensated ones.
Where the Thresholds Stand Now
No need to scramble—at least for now. The numbers are sticking at $684 per week or $35,568 annually for standard exempt workers. For highly compensated employees, the line stays at $107,432. If you’ve already made changes based on the proposed rule—like reclassifying roles or adjusting pay—it might be time to revisit those decisions and align them with the current law.
What This Means for Your Business
For some employers, this ruling brings a sigh of relief; for others, it may mean reversing costly adjustments that were already put into place. Either way, it’s a reminder that employment law is anything but static. Staying nimble is key. And if you haven’t yet reviewed your job classifications this year, now’s the perfect time.
Staying Compliant with the FLSA (Even Without the Update)
Just because the new thresholds didn’t pass doesn’t mean you’re off the hook. It’s essential to double-check that exempt employees meet both the salary AND duties tests. A paycheck above a certain amount doesn’t automatically equal exemption—job responsibilities matter just as much, if not more.
What’s Next? Stay Ahead of Future Changes
The 2024 proposal may be shelved, but it’s not the end of the conversation. Similar revisions could pop up again in the near future, and staying informed can help you avoid another round of scrambling. Keep an eye on labor updates and make ongoing compliance reviews part of your regular HR routine.
