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The Division of Labor’s Wage and Hour Division introduced a brand new rule that raises the minimal wage wanted to be exempt from extra time pay for sure employees. Beforehand, employees incomes lower than $35,568 yearly have been eligible for extra time pay in the event that they labored greater than 40 hours every week. Below the new rule, this threshold will enhance to $58,656 per yr.
To qualify for this extra time exemption, workers should earn at the least $58,656, and their jobs should primarily contain govt, administrative, or skilled duties. Staff incomes lower than this quantity can be entitled to extra time wages for any hours labored past 40 hours every week.
The Division of Labor has outlined the next timeline for implementing the brand new rule:
- Present Requirement: Staff should earn at the least $35,568 yearly, or $683 weekly, as set by the 2019 remaining rule. This calculation was based mostly on the twentieth percentile of weekly earnings within the Southern U.S. and the retail sector, utilizing information from 2019.
- Beginning July 1, 2024: The edge will increase to $43,888 per yr, or $844 weekly, utilizing the identical methodology however up to date with wage information from 2024.
- Beginning January 1, 2025: The edge will rise to $58,656 yearly, or $1,128 weekly, similar to the thirty fifth percentile of weekly earnings within the Southern U.S.
- From July 1, 2027: The wage threshold can be recalculated each three years, with the Division of Labor offering at the least 150 days’ discover earlier than every replace, based mostly on the identical earnings percentile.
A remark letter from Advocacy criticized the Division of Labor’s evaluation of the brand new rule. It argued that the monetary results on small companies have been underestimated and will result in important challenges, together with elevated payroll prices. Advocacy urged that the Division of Labor ought to carry out a extra thorough evaluation of the prices for compliance and think about different choices, comparable to a decrease wage threshold.
Picture: Envato
