“Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable.”
-Julie Su, Acting Deputy Secretary of Labor
While the United States Department of Labor (USDOL) codified a new rule that establishes new protections for many American workers on April 23, 2024, the regulation will not apply to the US territories. The rule, supported by the Biden-Harris administration, raises the minimum salary threshold for workers previously exempt from overtime pay due to executive, administrative, and professional (EAP) employee exemptions under the Fair Labor Standards Act of 1938. The rule will gradually increase the minimum salary threshold of overtime-exempt workers in the mainland US, reaching $43,888 by July 1, 2024, and $58,656 by January 1, 2025. A significant increase from the current annual threshold of $35,568, workers previously ineligible for paid overtime will now receive a premium for additional hours after the standard 40-hour workweek.
The USDOL clarified that the rule does not apply to the territories in their official exemption, stating, “The Department is not finalizing its proposal to apply the standard salary level to the US territories subject to the federal minimum wage and to update the special salary levels for American Samoa and the motion picture industry.”
This news accompanies testimony from employer organizations such as the Society of Human Resources Guam Chapter (SHRM), which have been vocal about their concerns. SHRM praised the decision not to raise the minimum overtime threshold in Guam, citing potential issues such as delayed hiring and layoffs. The organization states that “over 60% of surveyed employers indicated they would take to laying off employees, delay hiring, or delay promotions if the federal government mandates that salaried, white-collar employees making under $58,656 (the existing threshold) get overtime.” Despite the US territories’ lack of inclusion within the new USDOL rule, many residents expect the USDOL to raise the current $23,660 salary threshold in Guam to around $35,000, with Mike Pangelian, SHRM Guam Chapter spokesman attorney, saying, “I would not be surprised if USDOL proposes an increase in the special salary level for Guam and the other territories to something in the range of $600-$700 per week ($35,000-$37,000 annually)—the level previously applicable in the states—by later this year or sometime next year.”
A footnote in the official USDOL document addresses the unrepresented US territories, stating that it will “address these aspects of the proposal in a future final rule.” This addition opens the door for future changes to the minimum salary threshold status of the American territories as debates around raising this minimum continue. As business lobbyists battle against administrations regarding these issues, the role of the USDOL overtime rule in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands hangs in the balance.
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