Federal Overtime Rules in 2025

The U.S. Department of Labor (DOL) recently announced an increase in the federal salary threshold for exempt employees under the Fair Labor Standards Act (FLSA) to $55,000 annually (up from the current $35,568). However, this decision is currently stayed due to legal challenges, meaning the proposed increase has not yet gone into effect.

For now, employers must follow the existing threshold of $35,568 annually ($684 per week) to determine whether employees are exempt from overtime. Despite the stay, businesses should prepare for the possibility that the new threshold could still take effect. Planning ahead can help you avoid scrambling to comply if and when the change is implemented.

Washington-Specific Overtime Rules

Washington State has its own salary thresholds for exempt employees, which are higher than the federal level. For 2025:

• The minimum salary threshold for exempt employees in Washington is 2.5 times the state minimum wage for employers with 51 or more employees.
• For smaller employers (50 or fewer employees), the threshold is 2 times the state minimum wage.

Given Washington’s minimum wage increases annually based on inflation, the exact dollar amount for the exempt salary threshold changes each year. For updated figures, visit the Washington State Department of Labor & Industries.

Oregon-Specific Overtime Rules

Oregon generally follows the federal salary threshold for exempt employees. However, specific industries, such as manufacturing, agriculture, and health care, may have unique overtime provisions. Employers in these sectors must ensure compliance with both state and federal regulations.

For more information on Oregon wage and hour laws, visit the Oregon Bureau of Labor and Industries (BOLI).

Steps to Ensure Compliance

1. Conduct a Workforce Audit:
   • Review job classifications to ensure exempt employees meet or exceed the       applicable salary thresholds (federal, Washington-specific, or industry-specific).
   • Evaluate job duties to confirm that exempt employees perform tasks that meet the exemption criteria (e.g., executive, administrative, or professional roles).

1. Reclassify Employees When Necessary:
   • For employees who no longer qualify as exempt under the updated thresholds, reclassify them as non-exempt.
   • Clearly communicate the change to affected employees and explain how it impacts their pay and time tracking.

1. Implement Robust Time-Tracking Systems:
   • Use time-tracking software or systems to accurately record hours worked by non-exempt employees.
   • Educate employees on the importance of recording all work hours, including overtime, to ensure compliance.

1. Update Payroll Processes:
   • Adjust payroll systems to calculate overtime pay accurately for newly       reclassified non-exempt employees.
   • Verify that payroll staff are familiar with the updated rules and thresholds.

1. Establish Clear Policies on Overtime:
   • Develop or update your employee handbook to outline overtime policies.
   • Communicate guidelines on how overtime is approved and tracked to minimize       unauthorized overtime.

1. Budget for Increased Labor Costs:
   • Forecast the financial impact of overtime changes and include it in your annual budget.
   • Explore options such as redistributing workloads, adjusting schedules, or hiring part-time staff to reduce reliance on overtime.

1. Review State-Specific Compliance:
   • In Washington, regularly check updates to the state minimum wage to ensure exempt salary thresholds remain compliant.
   • In Oregon, ensure compliance with industry-specific overtime provisions if applicable.

1. Train Managers and Supervisors:
   • Provide training to managers on overtime laws, tracking requirements, and how to manage schedules to avoid unplanned overtime.
   • Ensure supervisors understand how to communicate changes to employees and answer their questions.

1. Consult Legal and HR Professionals:
   • Engage a business attorney or HR consultant to review your compliance strategy.
   • Use this opportunity to address any additional wage-and-hour law concerns, such as meal and rest break compliance.
     

Balancing Compliance and Business Costs

Managing these changes can be challenging, but compliance is critical to avoiding penalties and fostering trust with employees. Consider the following strategies:

• Adjust workloads or hire additional staff to minimize overtime costs.
• Use technology to improve efficiency and reduce reliance on overtime.
• Monitor overtime hours closely and address trends before they become a financial burden.

Stay Ahead of Changes

Oregon and Washington have unique overtime rules that require careful attention, particularly in light of the stayed federal decision on salary thresholds. While the federal changes are uncertain, businesses in these states must continue to comply with state-specific requirements and prepare for any potential updates.

By proactively addressing the current thresholds and planning for possible changes, you can ensure compliance, maintain a fair workplace, and minimize disruptions to your operations.

For detailed guidance on overtime laws in Oregon and Washington, visit:

• Washington State Department of Labor & Industries
• Oregon Bureau of Labor and Industries (BOLI)

With these steps and resources, your business can confidently navigate the complexities of overtime regulations in 2025, support fair pay practices, and foster positive employee relations—even in a changing legal landscape.

Click Here For Free Consult

This article is a service of Dolev Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session™.

Disclaimer

The information provided in this blog is intended for general informational purposes only and does not constitute legal advice. Overtime pay laws, salary thresholds, and other employment regulations are subject to change, and their application can vary depending on specific circumstances and jurisdictions. We recommend consulting with a qualified attorney or human resources professional to address your specific legal needs or compliance questions. This blog should not be relied upon as a substitute for personalized legal advice. Reading this blog or contacting our firm does not establish an attorney-client relationship. If you need assistance with employment law compliance or other legal matters, feel free to reach out to us to discuss your specific situation.