The U.S. Department of Labor (DOL) has announced a significant update to the regulations under section 13(a)(1) of the Fair Labor Standards Act (FLSA), impacting the minimum salary threshold for employees. This final rule is set to take effect on July 1, 2024.
Key Changes Effective July 1, 2024:
- Standard Salary Level: Increased to $844 per week ($43,888 annually) from the current $684 per week ($35,568 annually).
- Highly Compensated Employee (HCE) Threshold: Raised to $132,964 annually, including at least $844 per week on a salary or fee basis, up from $107,432 annually.
Upcoming Adjustments:
- January 1, 2025: The standard salary level will rise to $1,128 per week ($58,656 annually), and the HCE threshold will increase to $151,164 annually.
- Future Updates: Every three years starting July 1, 2027, the salary levels will be updated based on current earnings data.
Requirements for EAP Exemption: To qualify for the EAP exemption under the FLSA, employees must:
- Be paid a fixed salary not subject to reduction based on work quality or quantity.
- Earn at least the specified weekly salary level.
- Primarily perform executive, administrative, or professional duties as defined in the DOL regulations (29 CFR part 541).
An alternative test applies to certain highly compensated employees who meet a minimal duties test and earn above the higher total annual compensation threshold.
Stay informed to ensure compliance with these new regulations as they take effect. Download the ABMA Memo on Salaried Overtime Changes for practical tips on preparing for July 1. For more information, including a webinar overview of these changes, visit the U.S. Department of Labor’s webpage: Final Rule: Restoring and Extending Overtime Protections.
