Introduction
Update: The U.S. Department of Labor states that the 2024 overtime final rule was vacated on November 15, 2024. For enforcement, DOL says it is applying the 2019 rule’s thresholds: $684/week (standard salary level) and $107,432/year (HCE total annual compensation). This article explains the 2024 rule as it was published and what employers should monitor going forward.
In April 2024, the U.S. Department of Labor (DOL) published a final rule to raise the salary thresholds for the federal “white-collar” overtime exemptions under the Fair Labor Standards Act (FLSA). However, DOL says the 2024 final rule was later vacated and that enforcement is currently based on the 2019 rule thresholds. This guide summarizes the 2024 rule’s planned changes and the practical steps employers should take.
Outline of the Article
- Key Changes
- What this Means for Trade Businesses
- State-Specific Considerations
- Action Steps for Employers
- Conclusion
- FAQs - Frequently Asked Questions
Key Changes
Increased Salary Thresholds
One of the most significant changes in the 2024 final rule was a planned increase in the minimum salary threshold for white-collar employees (executive, administrative, computer-based roles and professional workers). Employees earning below this threshold must now receive overtime pay for working over 40 hours a week. To qualify for exemption from overtime pay, these employees must now earn at least $844 per week, which translates to $43,888 annually. That's an increase of $160 per week or $8,320 annually. This threshold will rise again in January 2025 to $1,128 per week ($58,656 annually). Note: DOL states the 2024 rule was vacated; for enforcement it is applying the 2019 threshold of $684/week.
For on-site teams, time attendance terminals enable employees to clock in and out digitally, allowing overtime hours to be calculated automatically based on configured company and legal rules.
What is a Highly Compensated Employee (HCE)?
A Highly Compensated Employee (HCE) is a category in the FLSA overtime regulations for certain salaried employees who earn above a defined total annual compensation threshold and meet a simplified duties test. HCE status is based on compensation level and job duties (not business ownership), and employers still need to confirm the role meets the applicable exemption requirements.
Changes to Highly Compensated Employees (HCE)
The DOL has also increased the total annual compensation requirement for Highly Compensated Employees (HCEs). Starting in 2024, HCEs must earn at least $132,964 annually, with this amount increasing to $151,164 in 2025. Additionally, these thresholds will be automatically updated every three years beginning in July 2027 to keep up with wage growth and inflation.
What This Means for Trade Businesses
For businesses, particularly those in the trade sectors such as construction, plumbing, or electrical work, it’s important to note that these changes primarily affect office and administrative staff. Field technicians and tradespeople typically fall under different classifications and are less likely to be impacted by these specific changes.
However, employers must carefully review the salaries of their white-collar employees. Those currently earning below the new thresholds will either need a salary increase to maintain their exempt status or will become eligible for overtime pay.
For mobile and field-based employees, GPS time tracking can support job-site verification (based on your policy and local rules) and improve time accuracy when employees move between locations.
State-Specific Considerations
Certain states, including California and New York, already have higher salary thresholds for exempt employees than the new federal standards. Businesses operating in these states may already comply with the upcoming federal thresholds, but it’s crucial to stay informed about the 2025 increases and any subsequent adjustments.
Action Steps for Employers
1. Review Current Salaries:
Conduct a thorough review of your employees’ salaries to determine who will be affected by the new thresholds.
2. Adjust Compensation:
Decide whether to raise salaries to meet the new requirements or to reclassify employees as non-exempt and pay overtime.
To manage overtime correctly under changing DOL rules, many employers use workforce management software to automatically apply overtime thresholds, route manager approvals, and prepare clean payroll-ready exports. See also: work time tracking.
3. Communicate with Employees:
Clearly inform your staff about these changes, how they will affect their pay, and any steps you are taking to comply with the new rules.
4. Plan for the Future:
Prepare for the 2025 increases and the automatic updates that will begin in 2027. Regularly review your compensation strategies to stay compliant.
Use Grownu's time and overtime tracking system to comply the new DOL changes
The 2024 DOL overtime rule changes are significant, but with proper planning and clear communication, businesses can navigate these updates smoothly. By reviewing and adjusting salaries where necessary and staying informed about future changes, employers can ensure compliance and maintain a motivated workforce. By using Grownu to review and adjust salaries as needed and stay informed about future changes, employers can ensure they meet the new requirements while maintaining a motivated workforce. All overtime can be easily calculated without any human interaction within the system.
For more detailed information, you can visit the Department of Labor’s overtime rulemaking page and Fair Labor Standards Act (FLSA).
This article is for informational purposes only and does not constitute legal advice.
Frequently Asked Questions
Last updated: January 11, 2026
This article is for informational purposes only and does not constitute legal advice.
- Review salaries for exempt roles against the new thresholds
- Decide whether to increase salaries to maintain exempt status or reclassify as non-exempt
- Update policies for timekeeping and overtime approval
- Communicate changes clearly to managers and employees
