Acting as the precision metalworking industry’s One Voice in Washington, DC, NTMA’s lobbying and strategic communications firms have been working tirelessly to ensure your voice is heard on Capitol Hill and projected by the media.
On April 23, 2024, the Department of Labor’s (DOL) Wage and Hour Division released a new overtime rule. Beginning July 1, 2024, this rule will make more workers eligible for overtime pay in the months and years to come.
Let’s dive into how this machining news will change current overtime law, its impact on machine shop management, and how NTMA is responding.
Current Law on Overtime Pay Thresholds
Under the Fair Labor Standards Act, the majority of employees who work more than 40 hours per week are eligible to be paid 1.5 times their regular rate for every additional hour worked.
While almost all workers who are compensated hourly are typically eligible for overtime, those who work full-time and earn salaries are typically only eligible if they make below a certain amount, or “threshold.” Above these thresholds, employers can claim that employees are “exempt” from overtime pay protections if their jobs consist primarily of executive, administrative, professional, or clerical duties.
Currently, most full-time salaried workers are automatically eligible for overtime pay if they earn below $35,568 annually.
A separate threshold exists for “highly compensated” employees. These workers are eligible for overtime if they make less than $107,432 annually.
Overview: Changes Under the New Overtime Rule
The new DOL rule will increase these overtime pay thresholds in two phases between July 1, 2024, and January 1, 2025.
Going forward, normal and “highly compensated” workers who earn below these new thresholds will be eligible for overtime pay.
|
Today |
July 1, 2024 | January 1, 2025 | |
| Normal threshold | $35,568 | $43,888 | $58,656 |
| “Highly compensated” threshold | $107,432 | $132,964 |
$151,164 |
Following these two phases, beginning in July 2027, these overtime exemption thresholds will automatically increase every three years.
How the New Overtime Rule Impacts NTMA Members
The new DOL rule on overtime thresholds will impact virtually every NTMA member with full-time salaried employees who earn less than the thresholds detailed above. These employers will need to rethink machine shop management by making adjustments to payroll systems, budgets, and workforce planning—all in order to properly account for potential increases in overtime pay.
The timeframe for making these changes is short, which may make it challenging to plan and adapt. For example, between now and July 1, 2024, some shops may need to:
- Reclassify full-time salaried employees as hourly or independent contractors
- Hire more part-time employees in lieu of full-time salaried ones
- Adjust employee schedules and meetings to minimize overtime
- Revise budgets and strategic plans to account for higher labor costs
During this process, NTMA members should consult with legal counsel and HR professionals to ensure that they remain compliant with DOL regulations both new and old.
NTMA’s Response to the New DOL Rule
While NTMA is not actively opposing this new rule, we remain committed to advocating for our members by promoting policies that will mitigate any risks that may result from the rule’s rapid implementation timeline and its impact on shop operations.
NTMA Represents Your Interests on Capitol Hill
At NTMA, we know the challenges that today’s machine shop faces as well as just how quickly government action and regulation can complicate machine shop management.
That’s why our advocacy teams work diligently (through initiatives such as One Voice) to fight for legislation that will have a positive impact on our member shops and the machining industry as a whole. As we continue these efforts in the wake of the new DOL overtime rule and others like it, we hope you’ll join us by bringing your voice to NTMA, One Voice, and, ultimately, to Capitol Hill.
Learn more about the benefits of joining NTMA today!
