New Federal Overtime Rule Challenged 

You might have read Cardinal’s recent Employer Alert ( that the U.S. Department of Labor [DOL] is changing the minimum salary thresholds for employees that are exempt from overtime. The published deadlines for the change in salary thresholds are as follows: 


July 1, 2024:  

The salary threshold increases from $684 per week [$35,568 per year) to $844 per week [$43,888 per year).  

January 1, 2025:  

The salary threshold increases to $1,128 per week [$58,656 per year). 


NOTE: Oregon law does not recognize an HCE exemption from overtime. Thus, an Oregon employer’s test to make employees exempt must satisfy the duties for an applicable exemption. 


These new rules have been formally challenged in court. 

On May 22, 2024, more than a dozen business groups and a company filed a lawsuit seeking to block the DOL’s new final rule. The rule requires employers to either provide salary increases to millions of exempt workers across the country or reclassify them so they are eligible for overtime. It is unclear if this lawsuit or other reported efforts will be successful. Previous efforts to increase the salary basis were put on hold by court decisions.  


Next Steps for Employers… Plan your salary strategy now! 

If you are an employer with exempt employees whose salary thresholds are below either the July 1st or January 1st levels, now is a good time to plan your strategy for implementing these new salary requirements. While the final rule may be subject to legal challenges [parts of the order may be upheld, modified, or put on hold indefinitely], employers will need to make some hard financial decisions, including creating a plan for compliance:  

  • Create a proposal outlining how the overtime rule will affect the organization and what options are preferable to avoid significant financial impact and employee morale concerns.  

Do you increase salaries to keep employees exempt from overtime? Do you make some exempt employees hourly?   

  • Craft an Employee Communication Plan. 

Create a communication plan to announce the changes to your affected employees. Educating employees on the regulatory changes and sharing a financial analysis can help individuals understand why the changes are necessary. If the workplace as a whole needs clarification on the overtime rule changes and how employees will be impacted, consider providing an overview of the new rule in a staff meeting.   

  • Should I announce to any affected employees now that you are going to meet the threshold on July 1st or January 1st 

Probably not right away. But this will depend on your specific circumstances. Note: If you do make changes and the new rule is overturned, it is hard to walk that salary increase back. But employers must let employees know there will be changes before the effective date.  


If you have any questions about the DOL’s salary requirements or any other wage and hour inquiries, please contact the HR Team at for assistance. Cardinal will endeavor to keep you updated.