L&E Legal Alert – DOL Issues Final Overtime Rule
DOL Issues Final Overtime Rule – New Salary Threshold Will Not Apply to Puerto Rico
On April 23, 2024, the Department of Labor (Department) unveiled the Final Overtime Rule raising the salary threshold for exempt employees. However, the new threshold will not apply to Puerto Rico at this time.
The Final Rule follows a Notice of Proposed Rulemaking published by the Department last Fall on September 8, 2023, which proposed an increase to the standard salary level equivalent to $1,059 per week for administrative, executive, and professional employees.
Contrary to the initial proposal, the Final Rule published yesterday does not include the updated salary threshold for Puerto Rico or other US Territories. The Department stated they “will address this aspect of its proposal in a future final rule.” Therefore, this final rule does not impose changes for Puerto Rico and the standard salary level to qualify as an exempt executive, administrative or professional employee remains at $455 per week.
For the US States where the new rule will apply, the Final Rule “Defining and Delimiting the Exemptions for Executives, Administrative, Professional, Outside Sales, and Computer Employees” will take effect on July 1, 2024. The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional (EAP) employees, and the highly compensated employee total annual compensation threshold, including a mechanism that provides for updates of the earnings thresholds every three (3) years.
Our Labor and Employment team will provide updates on any future developments and is always available to support your business with any questions or concerns regarding this topic. Please contact us at labor@estrellallc.com.