U.S. Department of Labor Finalizes Overtime Rule Guaranteeing Time-and-a-Half Pay for 1 Million Workers

WASHINGTON, DC — The United States Department of Labor (DOL) Wage and Hour Division announced that Phase Two of the updated Fair Labor Standards Act (FLSA) overtime exemption rule has officially taken full legal effect nationwide, guaranteeing overtime pay protections for an estimated 1 million lower-paid salaried employees.

Guaranteeing Fair Compensation for Extra Hours Worked

The finalized rule increases the standard salary threshold for executive, administrative, and professional exemptions from $43,888 to $58,656 per year ($1,128 per week), requiring employers to pay time-and-a-half overtime rates when affected salaried workers exceed 40 hours per workweek. The regulation establishes automatic threshold updates every three years tied to national wage data, preventing the erosion of worker overtime rights over time.

Acting Labor Secretary Julie Su stated that a hard day’s work deserves a fair day’s pay, affirming that lower-salaried managers and frontline workers must be compensated fairly for long workweeks.

Labor Unions and Business Association Stances

AFL-CIO and service employee unions celebrated the rule’s implementation, estimating workers will recover hundreds of millions annually in earned wages or gained personal time.

Retail and hospitality trade groups adjusted workforce scheduling models, converting certain supervisory roles to hourly compensation.

Enforcement Monitoring

DOL Wage and Hour Division investigators will conduct active workplace wage audits to ensure full compliance across all commercial sectors.