The 2025 update is expected to impact approximately three million workers and is calculated based on the 35th percentile of weekly earnings for full-time salaried workers in the Southern U.S., the lowest-wage Census region in the country.
Additionally, the rule increases the salary threshold for highly compensated employees to $132,964 in July, and subsequently to $151,164 in January, aligned with the 85th percentile of national salaried workers’ earnings. This is an increase from the current $107,432 threshold.
Future Adjustments and Ongoing Challenges
The DOL Unveils Final Overtime Rule also includes provisions for automatic updates every three years, based on the most recent earnings data to ensure the thresholds remain relevant.
While the rule has seen some modifications from its proposed version—largely due to the approximately 33,000 comments received during the consultation phase and the use of more recent data—it has also maintained certain elements from previous drafts.
For instance, a proposed alignment of salary thresholds within U.S. territories with the mainland has been deferred to a future rule. “This is an approach we sometimes adopt,” Looman explained, indicating a strategic phase-wise implementation.
