Beginning July 1st, the Department of Labor’s (DOL) Final Rule regarding “white collar” salary exemptions from overtime requirements is set to take effect. Under DOL’s new Final Rule, to be exempt from overtime, an employee will need make at least $844/week ($43,888/year) beginning on July 1, 2024. This amount will increase to $1,128/ week ($58,658/year) beginning on January 1, 2025. Employees will still need to meet the existing job duties requirements for the “white collar” salary exemptions. These requirements did not change.
Importantly, there are three major federal lawsuits challenging DOL’s authority to issue the Final Rule. These federal suits are currently active and because of this, there is still uncertainly surrounding whether the Final Rule will take effect on July 1st. Courts may decide prior to July 1st that DOL’s rule is unlawful and revert back to the previous salary thresholds of $684/week ($35,568/year).
Regardless of the potential challenges, Oregon employers should prepare for the rule to pass. Specifically, employers should complete a budget analysis of non-exempt, overtime positions against the new salary exemptions. Employers should be prepared to either switch positions to hourly or salaried non-exempt or to increase the salaries of exempt employees. Positions that need to be moved to non-exempt to comply with this rule will need training on what it means to be non-exempt, such as how to track hours, and rest and meal periods. Additionally, employers should watch out for pay equity issues under Oregon’s Pay Equity law.
The content of this alert is currently evolving and subject to change. Cascade will alert employers as news breaks between now and July 1st.