DOL Issues Final Rule Expanding Salary Thresholds For Overtime Exemptions

The Department of Labor (DOL) recently announced a Final Rule that will expand overtime protections for millions of workers. The Final Rule accomplishes this by increasing the salary thresholds required to qualify for the executive, administrative, and professional exemptions (white-collar exemptions) to the federal minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA).  The initial increases in the standard salary level and the highly compensated employee total annual compensation threshold will be effective on July 1, 2024. The Final Rule also provides for future increases of the salary threshold on January 1, 2025, July 1, 2027, and every three years thereafter to reflect the then current earnings data.  The current salary thresholds for exempt status and the new thresholds are summarized below.

Earnings Threshold	Current Amount	Minimum Salary Amount Beginning July 1, 2024	Minimum Salary Amount Beginning January 1, 2025	Minimum Salary Amount Beginning July 1, 2027, and every 3 years thereafter
Standard Salary Level	$684 per week (equivalent to a $35,568 annual salary)	$844 per week (equivalent to a $43,888 annual salary)	$1,128 per week (equivalent to a $58,656 annual salary)	To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.
Total Annual Compensation Requirement for Highly Compensated Employees (HCEs)	$107,432 per year, including at least $684 per week paid on a salary or fee basis	$132,964 per year, including at least $844 per week paid on a salary or fee basis	$151,164 per year, including at least $1,128 per week paid on a salary or fee basis	To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.

The DOL’s Final Rule will undoubtedly be challenged in court.  For now, however, employers should prepare to comply with the new salary thresholds by July 1, 2024.  Stay tuned for updates regarding the anticipated legal challenges. 

For questions regarding DOL’s Final Rule increasing the salary thresholds for overtime exempt status or any other labor and employment law matter, please contact any of the attorneys at Hoffman & Hlavac. To stay updated on key labor and employment law developments that affect your workplace, be sure to subscribe to this blog and follow us on social media!