ALEXANDRIA, Va. —Emily M. Dickens, SHRM Chief of Staff and Head of Government Affairs, issued the following statement in response to the Department of Labor's final rule on overtime:
“Yesterday, the U.S. Department of Labor (DOL) announced the details of the final rule for overtime regulations. The new rule raises the salary threshold for executive, administrative, professional, outside sales, and computer employees, often referred to as executive, administrative and professional (EAP) or white-collar employees. The DOL's new rule also specifies when future adjustments will be made.
The new EAP salary level that determines overtime exemption will see a significant increase from $35,568 annually to $58,656 annually. Additionally, the threshold for Highly Compensated Employees (HCEs) will rise from $107,432 annually to $151,164 annually. The new rule establishes an updating mechanism that will begin three years after the initial update (July 1, 2027), and every three years thereafter, using the methodologies that were in place at the time of the updates. Organizations will have until January 1, 2025 to come into compliance.
Although SHRM and its membership support reasonable increases to the EAP salary threshold that reflect the modern economy, the nearly 65% increase from the current level may not be in line with local wage rates for employees holding administrative, professional, and executive positions in some areas of the country. For this reason, SHRM advocated for a more nuanced, geographically tailored approach to any increase in the EAP salary threshold.
Lastly, SHRM supports regular and reasonable increases to the salary threshold to ensure certainty for budgeting, as well as attraction and retention of EAP employees. However, SHRM believes that any future adjustment should follow a notice-and-comment period and a comprehensive analysis of worker earnings and economic trends. SHRM urges that any future increases as contemplated in the regulation be reviewed before a final proposal is presented and that any such increase be subject to notice and comment to ensure that it includes considerations of the current economic landscape and other relevant labor and business factors.
SHRM will ensure that its members are well-equipped to follow the final rule and applicable DOL guidance while continuing to advocate for reasonable, sound public policy that meets the needs of all workers and provides certainty for HR professionals and their employers.”
About SHRM
SHRM is a member-driven catalyst for creating better workplaces where people and businesses thrive together. As the trusted authority on all things work, SHRM is the foremost expert, researcher, advocate, and thought leader on issues and innovations impacting today’s evolving workplaces. With nearly 340,000 members in 180 countries, SHRM touches the lives of more than 362 million workers and their families globally. Discover more at SHRM.org
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