Final Overtime Rule Coming in April 2024, DOL Says

Author: Michael Cardman, HR & Compliance Center Senior Legal Editor

December 8, 2023

The US Department of Labor (DOL) plans to finalize its overtime rule in April 2024, according to its most recent regulatory agenda.

The DOL currently plans to have the rule take effect 60 days after it is finalized - significantly less time than the 96- to 192-day windows it gave to employers during the previous three overtime rules. The DOL said it believes that 60 days will give employers plenty of time to prepare because they are familiar with what needs to be done after the 2019 overtime rule and because "changed economic circumstances have caused a strong need to update the standard salary level." 

If the DOL sticks to its April deadline and does not change the 60-day window, the rule could take effect as soon as June 2024.

The DOL often misses the deadlines it sets for itself in its regulatory agenda. For example, it said it would issue its proposed rule in May 2023. Then it pushed that deadline back once again to August before eventually publishing its proposed rule in September.

Nevertheless, employers should prepare for the possibility that the overtime rule will arrive on time this go-round. With the 2024 election less than a year away, the Biden administration will want to finalize its overtime rule as soon as possible to give it time to defend an expected legal challenge. It will also minimize the chances that the rule is rescinded under the Congressional Review Act if Republicans win the White House or a veto-proof majority in Congress.

The overtime rule will increase the minimum annual salary for most exempt employees paid on a salary basis from $35,568 per year to match the 35th percentile of weekly earnings of full-time nonhourly workers in the lowest-wage Census Region (projected to be between $55,068 per year and $60,209 per year). As a result, employers of any of the estimated 3.4 million overtime-exempt employees who make less than the new minimum salary will need to either raise those employees' salaries or reclassify them as nonexempt.

In related news, the DOL's independent contractor rule remains scheduled for November 2023 - a deadline the DOL has already missed.