Under the new U.S. Department of Labor overtime rules that took effect in 2024, millions of salaried workers who were previously classified as “exempt” are now legally entitled to overtime pay at time and a half.
This change is driven primarily by a sharp increase in the federal salary threshold for exemption, along with continued enforcement of strict job duty tests.
If you earn below the new salary cutoff and your daily work does not meet the legal definition of executive, administrative, or professional duties, your employer must now pay you overtime for hours worked beyond 40 in a week.
This shift fundamentally restructures how salaried work is treated in retail, healthcare, offices, education, logistics, and many service industries.
What Actually Changed in the New DOL Overtime Rules
For years, employers relied heavily on outdated salary thresholds to classify workers as exempt. The old federal level of $684 per week ($35,568 per year) allowed many lower-paid salaried workers to be excluded from overtime protections even if they worked 50 or 60 hours per week.
The new rule dramatically raises that floor and updates the highly compensated employee category as well. This single change directly converts a large group of salaried workers into legally overtime-eligible employees overnight.
New Federal Salary Threshold Timeline
| Effective Date | Weekly Salary Threshold | Annual Equivalent |
| Before 2024 | $684 per week | $35,568 per year |
| July 1, 2024 | $844 per week | $43,888 per year |
| January 1, 2025 | $1,128 per week | $58,656 per year |
This means that any salaried worker earning under $43,888 in 2024 is no longer automatically exempt and must receive overtime pay unless a rare special exemption applies. In 2025, that cutoff rises again to $58,656, capturing an even larger share of white-collar workers.
What “Time and a Half” Actually Means in Practice
Overtime pay is not a bonus or incentive. It is a federal legal requirement under the Fair Labor Standards Act. Once eligible, a worker must be paid 1.5 times their regular hourly rate for every hour over 40 in a single workweek.
For salaried workers newly converted to non-exempt status, employers must calculate an hourly equivalent based on total weekly salary and scheduled hours. For example:
| Weekly Salary | Scheduled Hours | Hourly Rate | Overtime Rate |
| $850 | 40 | $21.25/hr | $31.88/hr |
| $950 | 45 | $21.11/hr | $31.67/hr |
| $1,050 | 40 | $26.25/hr | $39.38/hr |
Once converted, every extra hour becomes legally billable labor, not voluntary time.
Why Salary Alone Is Not Enough for Exemption
Many workers wrongly assume that being “on salary” automatically removes overtime rights. That has never been legally true. The law has always required both a salary minimum and a strict duties test to classify a worker as exempt.
With the salary hurdle rising sharply, even workers who clearly perform management or professional tasks may still lose exempt status simply because their pay falls below the new minimum.
But for workers near or above the threshold, the duties test remains decisive.
The Three Core Exempt Duty Categories Explained Clearly
1. Executive Exemption
This applies to true operational leaders, not informal supervisors.
- The employee must manage an entire business unit or major department
- The employee must regularly direct the work of at least two full-time employees
- The employee must have real authority over hiring, firing, or promotions
- Management must be their primary duty, not secondary work
A retail “assistant manager” who spends most of the day cashiering, stocking shelves, and unloading deliveries often fails this test even if they occasionally supervise others.
2. Administrative Exemption
This category is often misused. It does not cover general office staff or clerical roles.
- The employee must perform office or non-manual work
- The work must directly relate to business operations, not production
- The employee must exercise independent judgment on major business matters
Data entry staff, routine schedulers, order processors, and call center supervisors often fail this test despite being labeled “administrative” in job titles.
3. Professional Exemption
- Licensed engineers
- Attorneys
- Physicians
- Certified public accountants
- Some scientists and medical professionals
Creative professionals such as designers and writers may qualify only if their role demands consistent original artistic judgment, not template-based production work.
Highly Compensated Employee Rule Also Changed
The Highly Compensated Employee (HCE) classification allows employers to bypass parts of the duties test when compensation is very high. This category also changed under the new rule.
| Category | Old Annual Threshold | New 2024 Threshold | 2025 Threshold |
| HCE | $107,432 | $132,964 | $151,164 |
Workers below this level must pass the full, detailed duties test, no matter how influential their job title sounds.
Back Pay and Enforcement Risks
If an employer fails to follow the updated rules, the financial penalties can be severe.
| Violation Type | Employer Risk |
| Unpaid Overtime | Back pay for up to 2–3 years |
| Willful Misclassification | Double damages |
| Recordkeeping Violations | Additional fines |
| Retaliation Against Workers | Federal lawsuits |
Employees who were improperly denied overtime under the new rules may be entitled to thousands or even tens of thousands of dollars in back pay.
When disputes arise over misclassification, unpaid overtime, or retaliation after reclassification, legal guidance becomes critical.
In these situations, consultation with an experienced advocate such as employment lawyer Michelle Cohen Levy can clarify whether an employer is violating wage law and what recovery options may be available.
This is especially important as companies adjust to the new DOL rules and compliance mistakes remain common across retail, healthcare, logistics, and office-based industries.
Who Is Most Likely to Gain Overtime Eligibility
The impact is especially strong in mid-level salaried roles that were previously caught in the gray zone between hourly and executive status.
- Retail management
- Restaurant management
- Healthcare administration
- Education coordinators
- Logistics supervisors
- Nonprofit program managers
- Office operations staff
- Tech support managers earning modest salaries
Typical Newly Eligible Roles
| Job Title | Common Pay Range | Likely Status After Rule |
| Shift Supervisor | $38,000–$48,000 | Overtime Eligible |
| Store Manager | $42,000–$55,000 | Mixed, Depends on Hours |
| Medical Office Manager | $45,000–$60,000 | Mixed |
| Project Coordinator | $40,000–$52,000 | Overtime Eligible |
| IT Support Lead | $44,000–$58,000 | Often Eligible |
Many of these workers already work 45 to 55 hours weekly. Under the new rule, that unpaid labor must now be compensated.
How Employers Are Adjusting to the New Rules
Instead of paying overtime, many employers are reshaping compensation structures.
- Converting salaried workers to hourly
- Raising salaries just above the new threshold
- Strictly limiting weekly hours to 40
- Redistributing workloads
- Adding time-tracking software for former salaried staff
This transition creates friction because salary-based unlimited workloads are no longer legally supported for lower-paid managers.
What Workers Should Do Right Now
- Check current weekly or annual salary against 2024 threshold
- Review actual daily job duties, not job titles
- Track hours worked carefully
- Review offer letters and job descriptions
- Request written clarification from HR
- Avoid volunteering unpaid extra time after reclassification
Overtime violations often occur not because employers refuse to pay, but because workers continue behaving like exempt employees after losing exempt status.
How State Laws Interact With the Federal Rule
Some states already impose stricter overtime rules than the federal government. In those states, the higher standard always applies.
Examples:
| State | Salary Threshold Standard |
| California | Tied to state minimum wage |
| New York | Higher thresholds in NYC |
| Washington | Aggressive tiered increases |
| Colorado | Independent state threshold |
Workers in these states often gain protection even sooner than the federal timeline requires.
Overtime eligibility also intersects closely with state-level wage protections that go beyond federal law.
A clear example is California’s minimum shift length, which requires most employers to pay workers for at least four hours of work when they are scheduled, even if they are sent home earlier.
This rule becomes especially relevant after the new DOL overtime changes, because newly reclassified hourly workers in California may now qualify not only for overtime after 40 hours, but also for minimum shift pay protections that did not previously apply when they were salaried.
The Bigger Economic Impact of the New Rules
This change reshapes the balance of power between time and compensation. For decades, middle-income salaried staff quietly absorbed unpaid overtime to prove dedication and ambition. The new rules legally cap that expectation.
Employers must now choose between paying overtime, increasing base salaries, or redesigning staffing models. Workers regain measurable value for time that was previously invisible.
Bottom Line
The new Department of Labor overtime rules decisively expand who qualifies for time-and-a-half pay.
If you earn below the updated salary threshold and your job does not meet the strict executive, administrative, or professional duties tests, you are now legally entitled to overtime pay for every hour worked beyond 40 per week.
