Overtime rules changing July 1

Millions more Americans will be eligible for overtime pay starting July 1.

Under the federal Fair Labor Standards Act, employees who work more than 40 hours a week get paid 1.5 times their regular pay for the extra hours. Almost all hourly workers are eligible for overtime pay but salaried workers only qualify if they earn below a set amount.

Currently, workers who earn $35,568 per year – the equivalent of $684 per week – are exempt from overtime pay. Starting July 1, however, that threshold will go up to $43,888 per year ($844 per week.) It will increase again on Jan. 1, 2025, rising to $58,656 per year, the equivalent of $1,128 per week.

After that, the salary threshold will be updated every three years using up-to-date wage data to determine new salary levels.

The rule also increases the total annual compensation requirement for certain high-earners – those who are not entitled to any overtime pay if they perform executive, administrative, or professional duties – from $107,432 per year to $132,964 per year on July 1, 2024, and then set it equal to $151,164 per year on Jan. 1, 2025.

According to federal estimates, 1 million more workers will become eligible for overtime pay after the July 1 change. An additional 3 million will be eligible after Jan. 1, 2025.