A final rule from the U.S. Department of Labor extending overtime protections for millions of salaried workers has gone into effect as of July 1.

The rule, titled "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees", revises the Fair Labor Standards Act so that lower-paid salaried employees who should receive overtime protections under the law receive them.

As of July 1, roughly 1 million workers making $43,888 or less are newly eligible for overtime benefits. In 2025, the salary threshold will increase to $58,656, then update every three years.

“For more than 80 years, the 40-hour workweek has been a pillar of fairness for American workers," said Acting Secretary of Labor Julie Su. "It’s the promise of going home to loved ones after putting in your time, not endless hours for flat pay. Far too many are stuck in jobs that disregard this principle. Today, our rule to restore that balance by expanding overtime protections for our nation’s lower-paid salaried workers goes into effect."

The estimated number of workers potentially eligible for expanded protections in the first year include 740,000 in the Northeast, 930,000 in the Midwest,1.87 million in the South and 790,000 in the West. According to the Economic Policy Institute, 2.4 million of these workers are women and 1 million are workers of color. Overall, the 4.3 million workers represents 3% of workers subject to the Fair Labor Standards Act.

The Economic Policy Institute estimates the final rule will result in a transfer of $1.5 billion annually from employers to workers in increased pay. 

Previously, the Department of Labor, under the Obama administration, proposed to double the then-current $23,660 per year eligibility threshold. The Trump administration withdrew this proposal and instead proposed an increase to $35,568, which was adopted in March 2019.

Overtime pay protections in the Fair Labor Standards Act ensure that most workers who put in more than 40 hours a week are paid 1.5 times their regular pay for the extra hours they work.