A New Federal Overtime Rule Just Went Into Effect

Employees covered by the Fair Labor Standards Act are entitled to at least one-and-a-half times their rate for hours worked beyond the 40-hour workweek, unless they are exempt. **Previously**, those exemptions included salaried employees primarily performing "executive, administrative, or professional duties" and making $35,568 per year or more, per the Department of Labor. Now, that minimum salary threshold has increased to **$43,888 per year** and will increase even further to** $58,656 on January 1, 2025. ** What is Different in New York For our clients in New York, we have be working through this increase for a few years now. Many clients converted some salary employees to be paid hourly. While that means some overtime will be paid, the total wages could be less than what New York mandates, For 2024, the minimum salary thresholds for exempt executive and administrative employees is 1,200 per week (approximately $62,400 per year) for New York City and its surrounding counties and $1,124.20 per week (approximately $58,458.40 per year) for the rest of the state. For example, let's say one of your employees is paid a fixed salary of $50,000 in New York City. That would not meet the requirements. You would either need to increase the salary to $62,400 or start paying this employee on an hourly basis for all hours worked. Assuming a full time schedule, that would work out to just over $24.00 per hour. If this employee works on average 10 hours of overtime per week, then the salary of $62,400 is a better option. It is crucial for employers to stay informed about these evolving wage regulations. Businesses must carefully review their payroll practices to ensure compliance. Whether adjusting salaries or transitioning to hourly pay, it's essential to calculate the total compensation effectively to meet these new standards. By staying proactive and addressing these changes thoughtfully, businesses can navigate these regulatory shifts while ensuring fairness and compliance for their employees.