On April 23, 2024, the U.S. Department of Labor (DOL) revealed a conclusive regulation aimed at revising the existing criteria for white-collar employees seeking overtime exemption under the Fair Labor Standards Act (FLSA). These exemptions encompass executives, administrators, professionals, as well as certain roles in outside sales and computer-related fields. Additionally, some highly compensated employees may fall under the FLSA white-collar overtime exemption. This final rule will become effective on July 1, 2024.
Increased Salary Level
To qualify for this exemption, white-collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white-collar employees must receive to qualify for the exemption.
Starting July 1, 2024, the DOL’s final rule increases the standard salary level from:
- $684 to $844 per week ($35,568 to $43,888 per year); and
- $107,432 to $132,964 per year for highly compensated employees.
On January 1, 2025, the standard salary level will then increase from:
- $844 to $1,128 per week ($43,888 to $58,656 per year); and
- $132,964 to $151,164 per year for highly compensated employees.
Automatic Updates
The DOL’s final rule also includes mechanisms that allow the agency to automatically update the white-collar salary level thresholds without having to rely on the rulemaking process. Effective July 1, 2027, and every three years thereafter, the DOL will increase the
standard salary level. The agency will apply up-to-date wage data to determine new salary levels.
Employer Next Steps
Employers should become familiar with the final rule and evaluate what changes they may need to adopt to comply with the rule’s requirements.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
