Starting July 1, millions more Americans will become eligible for overtime pay, with tens of thousands of Alabama workers expected to benefit from updated regulations set by the federal Fair Labor Standards Act.

Currently, under the Fair Labor Standards Act, employees working more than 40 hours a week are entitled to 1.5 times their regular pay for the extra hours. While almost all hourly workers qualify for overtime pay, salaried workers are eligible only if their earnings fall below a certain threshold. However, in April, the U.S. Department of Labor revised its overtime pay rule.

Presently, salaried workers earning $35,568 annually or more, or $684 weekly, are exempt from overtime pay. Effective July 1, this threshold will increase to $43,888 annually or more, equivalent to $844 weekly. Further adjustments are scheduled for Jan. 1, 2025, when the threshold will rise to $58,656 annually, or $1,128 weekly.

The industries expected to see the largest impact include manufacturing, professional and business services, financial activities, health care and social services, according to the U.S. Department of Labor.

Moving forward, the salary threshold will be revised every three years based on current wage data to determine new salary levels.

Additionally, the rule raises the total annual compensation requirement for certain high-earning employees – those not entitled to overtime pay if they perform executive, administrative or professional duties – from $107,432 annually to $132,964 on July 1, and then to $151,164 on Jan. 1, 2025.

Federal estimates suggest that following the July 1 adjustment, approximately 1 million more workers will become eligible for overtime pay, with an additional 3 million expected to qualify after Jan. 1, 2025.