More hours could mean more money for more Americans and that includes those of us right here in Michigan, and that means hourly and salary workers.

A wave of financial relief could be on the horizon for many of us thanks to new overtime rules. The federal government is updating its overtime regulations, which means more Michiganders might soon find themselves eligible for extra pay. The Department of Labor previously updated its Fair Labor Standards Act (FLSA),  with changes starting as early as  July 1, 2024.

As it has been in the past, the FLSA required employers to pay their employees a minimum wage and for those employees who work more than 40 hours in a week to be paid overtime of at least 1.5 times the employee’s regular rate. This rule was focused on hourly employees, with salary employees being exempt from the rule. The new guidelines will show a big change.

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Starting July 1, the U.S. Department of Labor is raising the salary threshold for overtime eligibility. Currently, if you earn less than $35,568 annually, you're entitled to overtime pay (time and a half) for any hours worked over 40 in a week. The new proposal boosts this threshold to around $47,000. This change is designed to better reflect inflation and the cost of living increases since the last adjustment.

The increases won't stop there. Workers will see an adjustment again on January 1, 2025, when the threshold for salaried employees will change to them needing to make at least $58,656 per year to be exempt from overtime pay. There will then be a salary adjustment again on July 1, 2027, and it will continue to adjust every three years according to the FLSA final rule documents.

Reports indicate that the new rule with see that 1 million more workers will become eligible for overtime pay after the July 1 change, and then an additional 3 million eligible after the January 1, 2025 adjustment.

You can view the entire Final Rule disclaimer here. 

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