Overtime Rule

Issued under the Fair Labor Standards Act, the Overtime Rule exempts executive, administrative, and professional employees that earn a salary above a set threshold from the overtime pay requirement of time and a half after working 40 hours in a week.

In 2016, the salary threshold that had been in place since 2004 was raised from $23,660 to $47,476 a year.  Employers claimed that new salary threshold was too drastic, and a federal judge in Texas struck down the new rule a few weeks before it was to take effect on December 1, 2016.

In September 2019, the Labor Department issued a final rule raising the minimum annual salary threshold a worker must make to $35,568 before he or she can be deemed a "managerial" worker, along with increasing the annual compensation level for highly compensated employees to $107,432. The effective date is January 1, 2020. We are watching to see what happens next.