Overtime Pay Changes: What US Employees Need to Know in 2025

Overtime Pay Changes: In 2025, overtime pay changes have become a hot topic for millions of employees and employers across the United States. Whether you’re a salaried worker wondering if you’ll qualify for extra pay, a business owner trying to stay compliant, or an HR professional keeping up with labor laws, understanding these changes is essential.

This year, the conversation around overtime pay regulations has intensified, following key decisions by courts and actions by the U.S. Department of Labor (DOL). Most notably, the planned increase in the overtime salary threshold to $58,656 annually did not take effect, leaving the threshold at the 2019 level of $35,568 per year. Let’s break down exactly what happened, what it means for you, and how you can stay informed and compliant in 2025.

Overtime Pay Changes

In 2025, overtime pay changes remain in a holding pattern due to court intervention, with the salary threshold fixed at $35,568 annually. While the U.S. Department of Labor had aimed to increase the threshold significantly, a federal court ruling blocked those changes. However, the story isn’t over—the DOL has appealed, and future developments may shift the landscape again.

Employees and employers alike must stay alert, especially since state-level overtime rules may differ. Consulting official sources and legal experts can ensure you remain compliant and informed.

What Are Overtime Pay Rules?

Overtime pay refers to extra compensation for hours worked beyond the standard 40-hour workweek. Under the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to 1.5 times their regular hourly rate for overtime hours.

Traditionally, salaried employees earning above a certain salary threshold are exempt from receiving overtime. However, the federal government periodically revises this salary threshold to reflect economic conditions and wage growth.

What Happened to the Overtime Pay Threshold in 2025?

DOL’s Proposed Changes in 2024

In 2024, the U.S. Department of Labor (DOL) proposed raising the salary threshold for overtime exemption:

1. July 1, 2024: Increase from $35,568 to $43,888 annually
2. January 1, 2025: Further increase to $58,656 annually

This would have made millions of additional salaried employees eligible for overtime pay.

Court Decision in November 2024

However, on November 15, 2024, a federal court in Texas vacated the DOL’s rule, ruling that the department exceeded its authority in implementing the new salary thresholds. As a result:

1. The salary threshold reverted to $35,568 annually, the level set in 2019.
2. The planned increases did not take effect.

The DOL has since appealed this decision, and legal proceedings are ongoing. Updates could happen later in 2025.

Overtime Pay Changes: How Does This Affect You?

For Employees:

1. Salaried employees earning less than $35,568 annually are still eligible for overtime pay (unless their job duties fall under specific exemptions like executive, administrative, or professional roles).
2. If you expected to benefit from the threshold increase, you’ll remain under the old rules unless state-specific laws differ.

For Employers:

1. Compliance with the 2019 salary threshold ($35,568) is essential.
2. Stay updated on state labor laws and potential changes in federal rulings.
3. Consider reviewing employee classifications and payroll practices regularly.

States With Their Own Overtime Rules

Some states set their own salary thresholds that exceed federal minimums. For example:

Washington State Overtime Thresholds for 2025:

1. Small employers (1-50 employees): Minimum salary threshold = 2.0 times the state minimum wage
2. Large employers (51+ employees): Minimum salary threshold = 2.25 times the state minimum wage

For up-to-date details, visit Washington State L&I Overtime Guidelines.

California Overtime Rules:

California has stricter overtime laws, requiring overtime pay for:

1. Over 8 hours in a day or 40 hours in a week
2. Double time after 12 hours

Their salary threshold for exemption is based on state minimum wage and is higher than the federal limit.

Overtime Pay Changes: How to Check If You’re Eligible for Overtime Pay

Here’s a simple step-by-step checklist:

1. Check Your Salary: Are you earning less than $35,568 annually? If yes, you may qualify.
2. Review Your Job Duties: Some roles (executive, administrative, professional) are exempt, even if salary is below the threshold.
3. Check State Laws: Your state may have higher salary thresholds.
4. Track Hours Worked: Overtime only applies after 40 hours/week.
5. Consult HR/Employer: If unsure, request clarification from your company’s HR department.

Why Was the DOL’s Overtime Rule Blocked?

The Texas court argued that:

1. The DOL’s rule overly emphasized salary levels rather than job duties.
2. It could improperly exclude employees who meet exempt job duties criteria.

This isn’t the first time overtime rules faced legal challenges. Similar court cases occurred in 2016, highlighting how complex and politically charged labor law changes can be.

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FAQs on Overtime Pay Changes

1. What is the current federal overtime salary threshold in 2025?

The threshold remains $35,568 annually due to a court ruling that blocked the planned increase.

2. Will the DOL’s appeal affect 2025 rules?

Not immediately. The appeal is pending, and no changes will occur until a court decision is made.

3. Do states have different overtime laws?

Yes, many states like California and Washington set higher salary thresholds or additional overtime rules.

4. How can I check if I’m exempt from overtime pay?

Review both your salary and job duties under the FLSA guidelines. Exempt roles include executive, administrative, and professional positions.

5. Where can I find official information?

Visit the U.S. Department of Labor’s official website for federal guidelines.