New Salary Threshold For Non Exempt Employees
Current rules state that an employee must meet the minimum salary requirements of $684 per week or $35,568 annually for the employee to be
exempt from the FLSA overtime rules A new overtime rule has been implemented that will increase the annual threshold. Once DOL completes implementation of this rule, employees who are currently exempt and remain below the new salary threshold will no longer
be exempt, and are subject to overtime regulations/pay.
Timeline:
·
Effective July 1, 2024: Standard salary threshold increases from $684/week to
$844/week
o
Increases the “highly compensated employee”(HCE) compensation threshold from 107,432 to
132,964/year
·
Effective
January 1, 2025: Standard salary threshold increases to $1,128/week
o
HCE level will increase to
151,164/year
To Note About the Final Rule:
·
Continues use of non-discretionary bonuses and incentive payments to satisfy up to 10% of salary thresholds under certain
circumstances
·
Includes mechanism that
increases EAP(executive, administrative, professional) salary threshold every three years
·
Does not change existing job duties tests for any exemption
·
2 Most
recent increases have been challenged in court and the proposed rule will likely be challenged
Employers Should:
·
Review
employees exempt statuses and determine who may be affected by this overtime rule
·
Prepare to increase compensation or change exempt classification by
January 1, 2025, for employees affected by the full salary threshold increases
Legal
Update | DOL Announces Final Overtime Rule Increasing FLSA Salary Basis | Husch Blackwell
