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  • Writer's pictureJohnika Dreher

Equity in Compensation: The New FLSA Overtime Rule's Impact


The updates extend overtime protections to 4.3 million workers - over half of them women and nearly a quarter of them from diverse racial/ethnic backgrounds, concentrated in professional services, healthcare, social services, and finance. - Economic Policy Institute

The Fair Labor Standards Act (FLSA) upholds that hard work deserves fair pay in America. Its minimum wage, overtime, recordkeeping, and youth employment regulations safeguard worker rights across industries. At its core, the FLSA ensures covered nonexempt workers receive at least the $7.25 federal minimum wage and overtime pay at 1.5 times their regular rate for hours beyond 40 in a workweek.


However, for salaried "white collar" workers meeting certain duties tests, employers could claim an overtime exemption if salaries exceeded a threshold - which had fallen woefully out of date. The previous $684 per week ($35,568 annually) threshold allowed employers to require millions of modestly paid salaried staff to work excessive overtime with no additional compensation.


The Department of Labor's new overtime rule rectifies this imbalance. Effective July 1, 2024, the salary threshold increases to $844 weekly ($43,888 annually). On January 1, 2025, it rises to $1,128 weekly ($58,656 annually). With the new changes, there are standards for updating the thresholds every three years to maintain impact with the changing economy.



The updates extend overtime protections to 4.3 million workers - over half of them women and nearly a quarter of them from diverse racial/ethnic backgrounds, concentrated in professional services, healthcare, social services, and finance. Economic Policy Institute analyst Heidi Shierholz highlighted the significance: "The rule will result in $1.5 billion in annual pay raises."  


This $1.5 billion represents vital income stabilization for workers struggling with rising costs. But benefits extend beyond compensation. The rule incentivizes properly valuing employee time and well-being. "Before, overworking salaried staff above the old threshold cost employers virtually nothing," Shierholz explained. "This rule changes that by requiring overtime pay for extra hours."


The rule makes excessive overtime more costly and promotes sustainable scheduling to reduce burnout. Initiatives like this align with AllProfit HR's mission of building equitable, sustainable cultures that respect every employee's contributions. Compliance with wage and hour laws upholds fundamental fairness, preventing exploitation to enable professional and personal thriving.  


The FLSA updates to restore the promise of just compensation. As employers adapt, as your people, culture, and workplace empowerment partner, AllProfit HR guides fostering cultures of belonging while ensuring smooth organizational changes. Explore our FLSA roadmap. We can create workplaces that value each worker's time for lasting positive community impact.


Share Your Thoughts

Join the conversation on the transformative power of equitable compensation. Let's reimagine people-centered workplaces where everyone profits - personally and professionally.


What are your thoughts on fair compensation's role in fostering true workplace equity and belonging? 


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