Do you have employees working more than 40 hours a week and making less than $844 per week (equivalent to $43,888 per year)? If so, it’s important to review your payroll and staffing hours for 2024 and 2025 as overtime rules have changed. As always, make sure you are talking with your accountant or tax professional to ensure you are up to date on any changes that impact your business.
What are the main differences between exempt and non-exempt employees?
Non-exempt employees are those paid hourly or salaried employees paid an annual salary less than the federal minimum level. These employees are eligible to be paid overtime for any hours worked over 40 hours a week. Exempt employees have a set salary above the minimum federal level, which is currently $844 per week or $43,888 per year, and are not eligible for overtime pay.
What changes could impact payroll for 2024?
Salaried employees making less than $844 per week are now considered eligible for overtime if they work more than 40 hours per week. These employees are considered non-exempt employees. Employees eligible for overtime must be paid 1.5 times their normal hourly rate if they work more than 40 hours in a week's time. In 2023, employees that made less than $684 were eligible for overtime.
Are there future changes for 2025?
By January 1, 2025, any employee that is making less than $1,128 per week or $58,656 per year is considered non-exempt and is eligible for overtime with the additional hours over 40 hours per week paid at 1.5 times their normal hourly rate. If an employee is making more than $58,656 and working more than 40 hours per week they are considered exempt employees and not eligible for overtime.
What the New Overtime Rule Means for Workers | U.S. Department of Labor Blog (dol.gov)
Managing payroll can be complicated if you don’t have a system to track employee time and wages. KCARD can help review your current processes and help develop a system that works for your business. Reach out to kcard@kcard.info or give us a call at (859) 550-3972.