NLBMDA issues 'overtime' alert
The National Lumber and Building Material Dealers Association released the following alert:
The U.S. Department of Labor (DOL) announced a final rule that increases the salary threshold for mandatory overtime pay to $58,656 beginning in 2025.
The DOL’s final rule on overtime pay updates the minimum salary threshold in two phases. Effective July 1, 2024, the salary threshold for overtime pay will increase to an annual salary of $43,888, before increasing to $58,656 on January 1, 2025. Ultimately, this represents over a 60% increase over the current threshold of $35,568. The July 1, 2024, increase is based on the methodology used by the Trump Administration in the 2019 overtime rule update, while the January 1, 2025, increase will be based on the Biden Administration’s new methodology that sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest wage census region.
Furthermore, the highly compensated employee (HCE) threshold will be raised to $132,964 on July 1, 2024, and then to $151,164 on January 1, 2025, linking it to the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally. This represents a 71% increase from the current HCE threshold of $107,432.
Starting July 1, 2027, salary thresholds for both HCE and standard employees will automatically update every three years using the new methodology and applying up-to-date wage data.
NLBMDA has repeatedly urged the Biden Administration to withdraw its new framework for overtime regulations, which disproportionately impacts small businesses and the workers they employ, and is part of coalition efforts reviewing legislative and legal options on behalf of LBM dealers and the small business community. Business groups and employer organizations are already considering a lawsuit challenging the rule, but the phased-in implementation will impact how litigation is both pursued and decided over the next six months.
For questions in the meantime, please contact NLBMDA at [email protected].
