The Department of Labor (DOL) has issued a final rule to significantly expand overtime eligibility. If you are a worker in Pennsylvania, this new rule may affect your rights and compensation. This blog will explain the new rule and how it could impact you.
Understanding the New Overtime Eligibility Rule
On April 23, 2024, the DOL announced a higher salary threshold for overtime eligibility. The new threshold is set at $443,888 per year or $844 per week. This takes effect on July 1, 2024.
A second increase is planned for January 1, 2025. This will raise the salary threshold to $58,656 per year or $1128 per week.
Raising the salary threshold ensures that more workers qualify for overtime pay. Employees who earn less than the new threshold will now be eligible for overtime, regardless of their job duties. This change is expected to benefit millions across the United States, including Pennsylvania workers.
This means that if you work more than 40 hours in a week, you will be entitled to receive time-and-a-half for your overtime hours. This can significantly increase your earnings, especially if you frequently work long hours.
It is important to understand that the new rule does not change the duties test for overtime eligibility. Employees must still meet certain job duties criteria to qualify as exempt from overtime. However, the new rule focuses on increasing the salary threshold, ensuring that more workers are protected.
This salary threshold will also be updated every three years, beginning on July 1, 2027, to ensure it reflects current wage data.
Employers may respond to the new rule in several ways. They might raise salaries to maintain exempt status for certain employees. Alternatively, they may start paying overtime to employees who fall below the new threshold. Employers must comply with the law and ensure employees receive appropriate compensation regardless of their approach.
What This Means for Workers?
The new overtime eligibility rule for workers represents a significant shift in workplace compensation. Many employees who previously did not qualify for overtime pay will now find themselves eligible. This means that for every hour worked beyond the standard 40-hour workweek, these employees will earn 1.5 times their regular pay rate. Consequently, workers who regularly undertake additional hours can anticipate a noticeable boost in their income. This change acknowledges the extra effort put in by employees and aims to provide fair compensation for the additional time spent working.
The higher salary threshold offers greater financial protection for workers, ensuring a fairer distribution of overtime pay across various industries. Workers in lower-paid positions are particularly poised to benefit, as the new rule predominantly targets those earning below the updated salary threshold. The triennial updates to the salary threshold will help maintain alignment with evolving wage standards, thereby continually safeguarding workers’ rights to overtime compensation in the future.
However, workers should also be conscious that employers might adjust their strategies in response to these changes. Some might opt to increase base salaries to keep certain employees exempt from overtime, while others may instead start offering overtime pay. Workers need to stay informed and understand how these changes will directly affect their paychecks and job status. Awareness of one’s rights under the new rule will empower workers to engage in informed discussions with their employers and ensure they receive the compensation they are entitled to under the law.
Our Philadelphia Employment Lawyers at The Gold Law Firm P.C. Will Make Sure Your Workplace Rights Are Protected
The DOL’s new rule on overtime eligibility represents a significant change for many workers. The rule aims to provide fair compensation for longer working hours by raising the salary threshold. If you have questions or you think your employer is not paying you correctly under the new rules, speak with our Philadelphia employment lawyers at The Gold Law Firm P.C. today to learn about your rights and how we may be able to help you protect them. Call 215-569-1999 or contact us online to schedule your free consultation. With offices in Philadelphia and Pennsauken, New Jersey, we serve clients in South Jersey and Southeastern Pennsylvania, including Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Lehigh County, Montgomery County, and Cherry Hill.
