Employers that employ both EXEMPT and NON-EXEMPT employees need to be aware of a recent U.S. Department of Labor (DOL) rule, published on April 26, 2024. The rule increases the salary threshold that establishes who is exempt from minimum wage and overtime protections that apply to non-exempt employees, under the Fair Labor Standards Act (FLSA). The new, increased threshold limits go into effect July 1, 2024, and increase again on January 1, 2025. Here’s what you need to know about this change –
There are actually two (2) different types of exemption categories that apply to minimum wage and overtime rules:
|
Date |
Standard Salary Level |
Highly Compensated Employee Total Annual Compensation Threshold |
|
Before July 1, 2024 |
$684 per week ($35,568 per year) |
$107,432 per year, including at least $684 per week paid on a salary or fee basis. |
|
July 1, 2024 |
$844 per week ($43,888 per year) |
$132,964 per year, including at least $844 per week paid on a salary or fee basis. |
|
January 1, 2025 |
$1,128 per week ($58,656 per year) |
$151,164 per year, including at least $1,128 per week paid on a salary or fee basis. |
|
July 1, 2027 & every 3 years thereafter |
To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. |
To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. |
* Sourced from https://www.dol.gov/agencies/whd/overtime/rulemaking
Employers and Human Resource Professionals have to consider the impact of these changes on their workforce and review their options, which include –
Employees that have historically been categorized as exempt that fall short of the new salary thresholds may be eligible for overtime pay if no action is taken to correct the levels.
#####
