The United States Department of Labor (DOL) recently announced an amendment to the Federal Register rescinding the Biden Administration’s 2024 overtime rule. This technical amendment restores the overtime regulations in effect prior to July 1, 2024. This restores the salary threshold established during President Trump’s first term in office. There are two main takeaways.
Lowered Overtime Salary Threshold – the recent amendment lowers the threshold to $684 per week, which is $35,568 annually. The Biden Administration raised the threshold to $43,888 annually in 2024, with a planned subsequent increase to $58,656 in 2025.
Reversal of Expanded Overtime Eligibility – the change overturns the Biden Administration’s expanded overtime eligibility, which raised the salary threshold for white-collar exemptions under the Fair Labor Standards Act.
The 2024 amendment prompted some employers to reclassify employees or increase salaries to meet the increased salary minimums. The Davidson Group is happy to discuss the pros and cons of maintaining these organizational changes or reverting them to the previous compensation structures. We recommend that any compensation adjustments should be carefully reviewed regarding contractual obligations, employee relations and state-specific employment laws.
