Department of Labor Raises Overtime Pay Threshold

Over a million more workers could be eligible for overtime pay under the new rule.

The U.S. Department of Labor (DOL) has finalized a rule that will expand eligibility for overtime wages to an additional 1.3 million workers. Under the new rule, which takes effect January 1, 2020, employers must pay overtime (1.5 times the normal hourly rate) to workers who earn less than $684 per week ($35,568 per year). The existing threshold of $455 per week ($23,660 annually) remains in effect until 2020.

The increase is the first since 2004, although the Obama-era DOL issued a final rule in 2015 that would have raised the threshold to $913 per week ($47,476 per year). However, a federal court issued a permanent injunction that prevented the rule from taking effect.

The new rule also raises the salary threshold for the Fair Labor Standards Act's highly compensated employee exemption—from $100,000 to $107,432 per year.