The U.S. Department of Labor (DOL) has issued a Final Rule to increase the minimum salary requirements for the “white collar” exemptions (executive, administrative, and professional) from minimum wage and overtime pay requirements under the Fair Labor Standards Act (FLSA). The Final Rule will be implemented in two stages over six months, with the standard salary level increasing from $684 per week to $844 per week on July 1, 2024, and then to $1,128 per week on Jan. 1, 2025. The highly compensated exemption (HCE) total annual compensation level will also increase from $107,432 per year to $132,964 per year on July 1, 2024, and then to $151,164 per year on Jan. 1, 2025. These thresholds will be updated every three years beginning July 1, 2027, based on current earnings data.
The Final Rule, announced on April 23, 2024, is expected to impact approximately four million workers in its first year. It also includes automatic updates to the salary thresholds every three years. Legal challenges to the rule are anticipated, and its implementation on July 1, 2024, remains uncertain. Employers are advised to prepare for compliance with the new salary thresholds and consider reviewing the exempt status of their workforce to ensure compliance with the FLSA and state laws.
GCCA’s Employment Law Partner, Jackson Lewis, will be hosting a free webinar on April 29, 2024, at 3:00PM ET, to discuss the new rule’s requirements and offer guidance on strategies to comply. The webinar registration link can be found here. In addition to the webinar, you can access a comprehensive analysis of the rule here.