On April 26, 2024, the U.S. Department of Labor (DOL) published the much-anticipated final rule that will increase the minimum salary for many exempt employees. The change will affect exempt executive, administrative, and professional employees. The increase will take effect in two steps:

1. Effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888; and
2. Beginning January 1, 2025, the salary threshold will increase to $58,656.

Additionally, employees who are exempt under the “Highly Compensated Employee” exemption beginning on July 1,2024, must be paid $132,964 per year, and beginning January 1, 2025, must be paid $151,164 per year.

Starting July 1, 2027, salary thresholds will update every three years by using up-to-date wage data to determine the new salaries. Employers will receive at least 150 days’ notice before those changes take effect.

The last time the DOL attempted a significant change to the salary minimums, the rule was challenged and ultimately blocked just weeks before taking effect. While we have no way of predicting if that will happen again, it’s very likely that this final rule will be litigated.

If you have any questions about the FLSA Minimum Salary Threshold Change, please contact The Employer Group, and we would be happy to assist you!

 

 

This information does not constitute legal advice.