Department of Labor Releases Final Overtime Rule: What It Means for Districts
April 25, 2024
Earlier this week, the Department of Labor issued its final rule altering the overtime regulations under the Fair Labor Standards Act. The rule includes two-tiered increases to the minimum salary threshold and the threshold for highly compensated employees (HCE) as well as automatic updates to both thresholds.
The minimum salary threshold will be increased to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. This represents over a 60% increase over the current threshold of $35,568. The Department clarified that the first increase updates the minimum salary threshold using the Department’s current methodology, which was used in the 2019 Trump-era overtime rulemaking to set the current standard. The second increase then implements the Department’s new preferred methodology, which sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest wage Census region.
The final rule also implements automatic updates to the minimum salary threshold, which will be increased every 3 years.
Employer organizations are considering litigation challenging the rule, but this phased-in implementation will likely impact how litigation is both pursued and decided over the next six months.
What it means for districts:
- Read the related write up from EdWeek
- The rule does NOT make a change to the professional exemption, continuing the practice of keeping teachers ineligible for overtime pay. Teachers will NOT be eligible for overtime.
- While teachers and school administrators are exempt from the federal overtime rule, the change will lead to increased overtime costs for some district employees, like school nurses, athletic trainers, and librarians.
- It will likely also increase the burden of recordkeeping and tracking hours for more employees.
- Implementing: Districts will have to make the choice about whether to offer newly qualifying employees overtime, to hire additional employees to help lower their workloads, and/or to raise salaries to be above the cap.
Author
