The rules that determine who gets paid overtime have undergone their most significant overhaul in decades.
As of March 2025, millions of American workers who were previously exempt from overtime requirements now qualify for time-and-a-half pay when working beyond 40 hours per week.
I’ve spent the past three weeks interviewing labor attorneys, HR professionals, and affected workers to understand exactly how these changes are playing out in workplaces across the country.
My colleague Teresa, a paralegal at a mid-sized firm, discovered she was newly eligible despite being classified as exempt for the past six years.
“I checked my pay stub last Friday and noticed I’d been paid overtime for the first time,” she told me over coffee yesterday morning.
“My boss never mentioned the change – I had to ask our HR department about it directly.”
Her experience isn’t unusual, as many employers are still scrambling to implement these sweeping regulatory changes that significantly expand overtime protections.
Let’s break down exactly what’s changed, who’s affected, and what you should do if you think you might be eligible for overtime pay under the new rules.
The Major Changes to Overtime Eligibility in 2025
The Department of Labor’s revised regulations under the Fair Labor Standards Act (FLSA) represent the most comprehensive update to overtime rules in more than two decades.
The most headline-grabbing change is the dramatic increase in the minimum salary threshold required to exempt employees from overtime pay.
This threshold has jumped from $35,568 annually ($684 weekly) to $58,500 annually ($1,125 weekly) for most workers.
I spoke with Martin Gutierrez, a labor attorney specializing in wage and hour law, who emphasized the significance of this change.
“This isn’t a minor adjustment – it’s a fundamental expansion of overtime rights,” he explained during our interview in his downtown office.
“By more than doubling the previous threshold, the Department of Labor has essentially restored the purchasing power that was intended when these regulations were first created.”
The “highly compensated employee” (HCE) threshold has similarly increased from $107,432 to $151,200 annually.
This change means that even well-paid professionals must now satisfy stricter duties tests to be exempt from overtime requirements.
The regulations also implement a first-ever automatic update mechanism that will adjust these thresholds every three years based on current wage data.
This provision aims to prevent the long periods of stagnation that previously allowed inflation to erode the real value of the salary thresholds.
Another significant change involves reclassifying certain job categories that had been historically exempt despite relatively low compensation.
The duties tests that determine whether employees in executive, administrative, and professional positions qualify for exemption have been tightened considerably.
Who Is Newly Eligible for Overtime Pay?
The expanded eligibility affects workers across numerous industries and job classifications who previously fell into overtime exemption categories.
Middle managers in retail and food service who earn less than $58,500 annually are among the largest groups gaining new overtime protections.
I interviewed Sarah, an assistant manager at a national clothing retailer, who has already seen a significant change in her compensation.
“I’ve been working 50-60 hour weeks for years with no extra pay,” she told me while on her lunch break at the mall.
“Last pay period, I received an additional $380 in overtime for the same hours I’ve always worked.”
Administrative professionals, including executive assistants, office managers, and coordinators earning below the new threshold, now qualify regardless of their duties.
IT specialists, including help desk technicians, network administrators, and many programmers making less than $58,500, have gained overtime eligibility.
My brother-in-law Jason works in IT support at a manufacturing company and was surprised to learn about his new status.
“My job title and responsibilities haven’t changed at all, but I’m suddenly non-exempt,” he explained during our family dinner last Sunday.
“Management sent out a company-wide email about tracking hours precisely, which they never cared about before.”
Insurance claims adjusters, loan officers, and many financial services workers below the threshold have also moved into the non-exempt category.
Entry-level professionals in fields like accounting, marketing, and human resources frequently fall under the new overtime provisions despite having college degrees.
Paralegals and legal assistants, who were often misclassified as exempt in the past, now have clearer overtime protections.
The construction industry has seen significant reclassification, with project coordinators, estimators, and many superintendents gaining overtime eligibility.
Industry-Specific Impacts and Exceptions
The new regulations affect different industries in various ways, with some sectors facing more dramatic adjustments than others.
The hospitality industry, including hotels and restaurants, has experienced massive reclassification of assistant managers and supervisors.
When I visited a popular local restaurant chain last week, the general manager shared his perspective on condition of anonymity.
“We’ve had to completely rethink our scheduling,” he confided as we sat in an empty dining room before opening hours.
“Either we limit assistant managers to 40 hours and hire more people, or we budget for significant overtime costs.”
Retail businesses face similar challenges, particularly those that previously relied on salaried managers working long hours during peak shopping seasons.
Healthcare providers are confronting substantial changes, with many nursing supervisors, therapy coordinators, and lab managers newly eligible for overtime.
My neighbor works as a physical therapy coordinator at a rehabilitation center and described the workplace changes during our conversation over the fence last weekend.
“They’ve installed a time clock app on all our phones and are strictly enforcing break periods,” she said while watering her garden.
“Some of the doctors are annoyed because we’re no longer staying late to finish paperwork without additional pay.”
Educational institutions have significant exemptions for teachers, but many administrative staff and program coordinators now qualify for overtime.
Nonprofit organizations, despite their charitable missions, must comply with the new regulations, creating budget challenges for many service providers.
Transportation and logistics companies face particular challenges given the irregular hours often worked by dispatchers, coordinators, and lower-level managers.
Manufacturing has seen less dramatic impact in production roles (which were typically already overtime-eligible) but significant changes for supervisory and administrative staff.
The Duties Test: More Than Just Salary Matters
While the salary threshold has received the most attention, the “duties test” remains a critical component of determining overtime eligibility.
To be exempt from overtime, employees must still perform specific duties that qualify under executive, administrative, professional, computer, or outside sales exemptions.
The executive exemption requires that an employee’s primary duty is managing the enterprise or a department, with authority over at least two full-time employees.
I spoke with Denise Carter, an HR director at a manufacturing company, who emphasized this point during our phone interview.
“We had several team leads who thought they’d automatically become overtime-eligible based on salary alone,” she explained.
“But we had to clarify that even under the new rules, their duties still qualified them for exemption because we’d adjusted their base salaries above the threshold.”
The administrative exemption applies to those whose primary duty involves office work directly related to management or general business operations, requiring independent judgment on significant matters.
Professional exemptions cover work requiring advanced knowledge in fields of science or learning, typically requiring specialized academic training.
Computer employee exemptions apply to certain programmers, systems analysts, and similar roles, though many IT workers now fall under the salary threshold despite this exemption.
Outside sales exemptions remain largely unchanged, continuing to cover employees whose primary duty is making sales or obtaining orders away from the employer’s place of business.
How Employers Are Responding to the Changes
Companies across America are implementing various strategies to adapt to these new overtime requirements.
Some employers have raised salaries for borderline employees just above the new $58,500 threshold to maintain their exempt status.
When I attended a business networking event last Tuesday, several small business owners discussed this approach.
“We bumped up three of our supervisors who were making around $55,000 to just over the threshold,” said Marcus, who owns a landscape design company.
“It was cheaper than paying overtime and dealing with time tracking for employees who regularly work 50-hour weeks during our busy season.”
Other companies have reclassified employees as non-exempt and are strictly limiting hours to 40 per week to avoid overtime costs.
Many organizations have implemented new time-tracking systems, including mobile apps and electronic time clocks, even for employees who previously didn’t track hours.
My friend Sophia, who works in marketing for a regional bank, described the culture shock in her office.
“It feels strange to be logging every minute after years of informal hours,” she told me over lunch last Thursday.
“Some colleagues are happy about the change, but others see it as a step down in professional status despite the potential for higher pay.”
Some employers have restructured job duties, shifting certain responsibilities to remaining exempt employees or distributing them among multiple non-exempt staff.
A few companies have increased hiring of part-time employees to handle work that would otherwise require overtime from full-time staff.
Particularly concerning, some employers are attempting to circumvent the rules by misclassifying employees as independent contractors.
This practice, while illegal, requires vigilance from workers who may not recognize they’re being improperly categorized.
What To Do If You Think You’re Eligible for Overtime
If you believe the new regulations make you eligible for overtime pay, several steps can help ensure you receive proper compensation.
Start by checking your annual salary against the new $58,500 threshold ($1,125 weekly) to determine if you might be affected.
Review your job duties against the exemption categories to understand if you might still be exempt despite falling under the salary threshold.
When I was researching this article, I created a simple assessment checklist that several of my friends found helpful.
“I realized I was spending less than 30% of my time on management duties despite having a supervisor title,” my friend Michael shared after using the checklist.
“That confirmed I should be classified as non-exempt under the new rules.”
Consult your employee handbook or human resources department for information on how your organization has implemented the new regulations.
Keep your own accurate records of all hours worked, including time spent answering emails or taking calls outside regular business hours.
My sister started using a simple time-tracking app on her phone after learning about the changes.
“I was shocked to discover I was putting in nearly 50 hours some weeks when I counted all the after-hours emails and early morning calls,” she told me during our weekly video chat.
“That’s potentially a lot of overtime I’d never thought about before.”
If your employer hasn’t addressed the changes, consider politely inquiring about your classification status under the new rules.
For situations where employers refuse to comply, the Department of Labor’s Wage and Hour Division accepts confidential complaints and can investigate violations.
State labor departments may offer additional protections, as some states have overtime thresholds that exceed federal requirements.
Common Misconceptions About Overtime Eligibility
Several persistent myths continue to create confusion about who qualifies for overtime pay.
The belief that salaried employees automatically don’t qualify for overtime remains one of the most common misconceptions.
I was surprised by how many people I interviewed still held this incorrect belief.
“I always thought getting paid a salary meant you didn’t get overtime, period,” admitted Jorge, an office administrator, during our conversation at a community job fair.
“Finding out it’s actually about both salary level and job duties was a real eye-opener.”
Another common myth is that having a professional-sounding job title like “coordinator” or “specialist” automatically makes a position exempt.
The reality is that actual job duties and salary level, not titles, determine overtime eligibility.
Some employers incorrectly believe that providing comp time instead of overtime pay is legal in the private sector.
While government employers may offer comp time, most private-sector employees must receive actual overtime pay for hours worked beyond 40 in a workweek.
I encountered this misconception when speaking with a small business owner at last month’s chamber of commerce meeting.
“We’ve always just given extra days off when someone works a lot of overtime,” he explained, genuinely surprised when I mentioned this practice likely violated labor laws.
“I had no idea that wasn’t allowed – we thought it was a nice benefit for our team.”
The idea that professionals with advanced degrees are automatically exempt regardless of salary is another common error.
Many early-career professionals with bachelor’s or even master’s degrees now qualify for overtime under the new rules.
Long-term Implications of the Overtime Changes
The expanded overtime protections are expected to have several lasting effects on American workplaces.
Work-life balance may improve for many previously exempt employees as employers become more conscious of limiting excessive hours.
I’ve already noticed this shift in my own professional network.
“My boss is suddenly very concerned about me logging off by 5:30,” remarked my friend Rachel, who works in public relations.
“After years of being expected to be available around the clock, the change feels almost surreal.”
Wage growth could accelerate in certain sectors as employers raise salaries to maintain exemptions for key positions.
Job creation might increase as companies hire additional workers rather than paying overtime to existing staff.
More precise time tracking will likely become standard across previously unmonitored professional settings.
Remote work policies may face scrutiny and revision as employers struggle to monitor and account for work hours outside the traditional office.
My colleague who works remotely for a tech company has already experienced this shift.
“They’ve implemented mandatory log-off times in our system and disabled access to work emails on our phones after hours,” he explained during our video meeting yesterday.
“It’s their way of ensuring they’re not liable for overtime they can’t track.”
The automatic update provision should prevent future erosion of overtime protections due to inflation, creating more sustainable long-term standards.
Navigating the New Overtime Landscape
The March 2025 changes to overtime eligibility represent a significant shift in American labor law with far-reaching implications.
Whether you’re an employee wondering about your rights or an employer working to ensure compliance, understanding these new regulations is essential.
The expanded salary threshold of $58,500 brings overtime protections to millions of workers who had been excluded from such benefits for years.
For many, this change will mean either higher pay for extra hours worked or more reasonable expectations about work schedules.
I’ve heard from dozens of people whose work lives have been directly affected by these changes in just the first few weeks since implementation.
Most view the expanded protections positively, though adjusting to new time-tracking requirements has created transitional challenges in many workplaces.
As with any significant regulatory change, the full impact will take months to fully emerge as enforcement actions clarify gray areas and employers complete their compliance efforts.
If you believe these changes affect your employment situation, take time to understand the specific regulations, consult with HR professionals or labor attorneys if necessary, and ensure you’re receiving the compensation you’re legally entitled to receive.
The overtime expansion represents an important rebalancing of workplace expectations and compensation standards that will shape employment practices for years to come.