Labor Department Finalizes New Overtime Salary Requirements

Contact: Brad Mannion
[email protected]
Director, Labor, Health & Safety
(202) 266-8265

The U.S. Department of Labor (DOL) issued significantly increasing the salary level for determining overtime pay requirements for certain salaried employees.

Effective July 1, 2024, the salary threshold will increase the annual salary level from $35,568 to $43,888, and then to $58,656 on Jan. 1, 2025, marking a nearly 65% increase from the current salary threshold.

Additionally, beginning July 1, 2027, salary levels will update every three years using up-to-date wage data.

Under the Fair Labor Standards Act, salaried workers classified as executive, administrative, professional, outside sales and computer employees are exempt from overtime pay requirements if a worker earns at or above a defined salary level called the “standard salary.” Under the final rule, salaried workers — which often include construction supervisors — earning less than the finalized standard salary levels per year will be eligible to receive the standard overtime rate for hours worked over 40 in a workweek.

NAHB submitted comments when DOL issued the proposed rule in late 2023, citing the negative impact such a significant increase would have on housing affordability, among other concerns. Additionally, during multiple DOL listening sessions, NAHB members questioned the timing of a salary level update, as the latest update went into effect less than five years ago.

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