The U.S. Department of Labor's (DOL) new rule increasing the salary level for determining overtime pay requirements for certain salaried employees goes into effect on July 1.

Beginning July 1, workers categorized as executive, administrative or professional employees earning less than $43,888 annually will be eligible for overtime pay. Additionally, the salary level will increase to $58,656 on Jan. 1, 2025, marking a nearly 65% increase from the current salary threshold of $35,568, and beginning July 1, 2027, salary levels will update every three years using up-to-date wage data.

Under the Fair Labor Standards Act, salaried workers classified as executive, administrative, professional, outside sales and computer employees are exempt from overtime pay requirements if a worker earns at or above a defined salary level called the "standard salary." Under the final rule, salaried workers - which often include construction supervisors - earning less than the finalized standard salary levels per year will be eligible to receive the standard overtime rate for hours worked over 40 in a workweek.

NAHB has remained active on the issue since the rule was first proposed in late 2023, including submitting comments in response to the proposal and joining a coalition of business groups in a lawsuit challenging the final rule. Additionally, NAHB held a webinar with more information about the final rule, the new salary levels and how your business can ensure compliance.