New Federal Rule Increases Pay for Some Salaried Workers
If you’re paid a salary, depending on how much you make, you may have been earning more as of July 1, thanks to a new federal Department of Labor (DOL) rule. Employers are filing court challenges to the rule, but they’ve had limited success which doesn’t affect California workers. Our Tustin employment lawyers can provide the guidance you need for those facing issues with their pay or other employment-related concerns.
If you think your employer may be breaking the law and not paying you all that you’ve earned, talk to a skilled employment attorney in California to learn about your rights and how we can help you. Call us at (949) 266-0880 for a FREE consultation. For comprehensive legal support, consider reaching out to an employment law firm that understands the complexities of employment law.
Employers May Need to Choose Higher Salary or Pay Overtime to Some Employees
This new rule forces employers to raise the salaries of some employees or pay them overtime if they work more than a standard week. The total number of people affected could be in the millions, according to the Associated Press.
This is the biggest expansion in federal overtime eligibility in decades. Employers must pay overtime to salaried workers making less than $43,888 annually in some administrative, executive, and professional roles. That amount had been $35,568 and rises to $58,656 at the start of 2025. The prior salary number was set by the Trump administration in 2019. A court challenge overturned a higher number created by the earlier Obama administration.
Under federal law, nearly every hourly worker in the US is entitled to overtime pay after working 40 hours a week. However, salaried workers don’t qualify for overtime pay unless their income is below a certain level. The new rule impacts that level.
Whether someone qualifies for overtime pay depends on several factors. In the 1940s, the DOL added a pay amount to discourage employers from misclassifying hourly workers who earn overtime as salaried employees who would not.
Some highly compensated workers also benefit from the new rule. The former $107,432 annual figure for highly-compensated salaried employees increased to $132,964 on July 1. That figure is scheduled to increase to $151,164 by the start of 2025. For comprehensive legal support, consider reaching out to an employment law firm that understands the complexities of employment law.
The federal Labor Department estimates that the new rule will require 4 million lower-paid salary workers and 292,900 more higher-compensated workers who were exempt under past regulations to have their salaries increased or be paid overtime.
Pending Legal Action Tries to Repeat the Successful in Stopping a Similar Rule by the Obama Administration
A federal judge in Texas on June 23 temporarily prevented the rule from being applied to state employees, according to Reuters. U.S. District Judge Sean Jordan granted the state’s motion for temporary relief, stating the current rule improperly bases overtime pay eligibility on workers’ wages rather than their job duties. The judge’s action was taken before fully hearing the evidence and arguments required in a full trial.
Jordan also presides over a challenge to the rule by business groups. A small marketing firm is also disputing the rule in a different Texas federal court.
These cases try to end the overtime rule because they claim it goes beyond the DOL’s statutory authority due to its focus on minimum salary levels rather than an employee’s duties to decide if a worker should be classified as exempt from overtime pay.
Challengers cite the Eastern District of Texas federal court invalidating a 2016 Obama Administration overtime rule. The court found that it improperly made salary the only issue in deciding exempt status, ignoring the duties test in the Fair Labor Standards Act.
Contact Our Wage Theft Lawyer in Tustin Today!
If you aren’t paid what you’ve earned, fight back. Wage theft is illegal, and we can hold your employer accountable. The Tustin employment lawyers at MJB Law Group have helped workers across Orange County and Southern California collect the wages they need to support their families and live their lives.
Contact us for a FREE case evaluation and consultation. Call us today at (949) 266-0880 or fill out our confidential contact form.
