The landscape of employment law is ever-evolving, and the recent announcement by the U.S. Department of Labor (DOL) on April 23, 2024, regarding the final rule on salary exempt employees’ minimum salary thresholds underscores this reality. Effective July 1, 2024, this final rule carries implications that necessitate careful consideration and proactive measures from employers to ensure compliance and operational efficiency.

Key revisions include adjustments to the minimum exempt salary threshold and the highly compensated employee total annual compensation threshold, along with provisions for future scheduled updates impacting earnings threshold minimums.

 

EFFECTIVE

DATE

 

SALARY LEVEL

HIGHLY COMPENSATED EMPLOYEE

TOTAL ANNUAL

COMPENSATION THRESHOLD

Before July 1, 2024

$684/week

($35,568/year)

$107,432/year

July 1, 2024

$844/week

($43,888/year)

$132,964 per year

January 1, 2025

$1,128/week

($58,656/year)

$151,164 per year

July 1, 2027 &

every 3 years

thereafter

 

To be determined

 

To be determined

Navigating the final rule may seem daunting, but employers have access to resources to facilitate compliance:

  • Department of Labor Resources: The DOL offers guidance, FAQs, and compliance assistance materials to help employers understand and implement the final rule effectively. https://www.dol.gov/agencies/whd/overtime/rulemaking
  • Legal Expertise: Employers may seek guidance from legal counsel specializing in employment law to navigate complex regulatory changes and mitigate potential risks.
  • Industry Support: Industry associations provide valuable resources and support tailored to specific sectors, assisting employers in interpreting, and implementing the final rule within their organizations.
  • Internal Expertise: HR professionals play a vital role in interpreting and communicating the final rule’s implications within organizations. Employers should leverage their expertise and support throughout the compliance process.

 

Other Related Reminders:

To qualify for exemption under the FLSA, employee positions must satisfy specific criteria outlined by the DOL, including meeting criteria under the Salary and Duties Tests:

  • Salary Basis: Employees must receive a predetermined and fixed salary that is not subject to reduction based on variations in work performed. Additionally, employees must earn at or above specified weekly salary threshold as defined by the FLSA regulations
  • Duties Test: Employees must primarily engage in executive, administrative, or professional duties as defined by DOL regulations.

Additionally, a separate considerations apply to highly compensated (HC) employees who meet certain salary and duties requirements. Learn more by accessing the DOL’s provided Fact Sheet #17H