Final Overtime Rule Released, NAED Commits to Pushing Back

ST. LOUIS — Seemingly, every time an administration changes from Democrat to Republican (and vice versa) the Department of Labor (DOL) makes changes to the wage level at which overtime rules apply – the wage levels are defined at both ends of the compensation range. Electrical distributors have, from time to time, faced action from the DOL Wage and Hour Division (WHD) based on complaints from disgruntled/former employees that said the company denied them overtime payments or their incentive comp programs were out of compliance with these rules. This month DOL finalized their latest iteration of the “Overtime rule” which NAED is dedicated to pushing back against with our coalition partners. The Partnership to Protect Workplace Opportunity (PPWO) had previously filed comments against the rule and released a statement available here.

The new OT rule utilizes a two-tiered system for the minimum salary threshold and highly compensated employees (HCE) which also includes automatic updates for both thresholds every 3 years. Specifically, under the rule, the minimum salary threshold is increased to $43,888 on July 1, 2024 and to $58,656 on January 1, 2025 (a 60% increase versus the current $35,568 threshold). The HCE threshold is raised to $132,964 on July 1, 2024 and then to $151,164 on January 1, 2025 (a 41% increase from the current threshold of $107,432). Both of the 2025 thresholds will be calculated using the new methodology which sets the minimum salary threshold to the 35^th percentile of full-time workers in the lowest wage Census region and sets HCE at the 85^th percentile of full-time workers nationally.

In response to the final rule, NAED Senior Vice President Ed Orlet said: “The overtime rule is the latest in a barrage of regulations from DOL that could negatively affect NAED member businesses. Under this new standard, many workers may have to be reclassified and may lose opportunities to advance in the workplace. Small businesses will face the challenge of navigating the new rules under the threat of being flagged for non-compliance. NAED is committed to digging in and fighting against this new rule on behalf of our members who are already facing regulatory compliance challenges on multiple fronts.”

NAED will continue to keep you updated on the latest regulatory developments and litigation surrounding new DOL rules and regulations.