DOL Issues Final Rule Regarding Salary Under the FLSA

DOL Issues Final Rule Regarding Salary Under the FLSA

On April 23, the U.S. Department of Labor (DOL) issued its final rule regarding the salary threshold for overtime exemptions under the Fair Labor Standards Act (FLSA). The final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” makes changes to salary requirements for highly compensated employees (HCEs) and exempt employees and extends overtime protections.

The FLSA defines exempt and non-exempt status for employees. Individuals classified as non-exempt are entitled to time and a half for hours worked over forty per week. To determine exempt status there is a duties test, unchanged by these regulations, and a salary test. These regulations changed the salary test as described below and apply it to an escalator every three years.

The standard salary level will increase in two phases from $684 per week ($35,568 per year) to:

  • July 1, 2024: $844 per week ($43,888 annually)
  • Jan. 1, 2025: $1,128 per week ($58,656 annually)

The highly compensated exemption annual compensation level will increase from $107,432 per year to:

  • July 1, 2024: $132,964 per year
  • Jan. 1, 2025: $151,164 per year

The salary thresholds will be updated every three years beginning July 1, 2027. The Final Rule is expected to go into effect on July 1, 2024.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

DOL Issues Final Rule Regarding Salary Under the FLSAhttps://www.cbiz.com/Portals/0/Images/GettyImages-1992829736-2.jpg?ver=yv3eSUoeJi9W7TL-cVBUWA%3d%3dhttps://www.cbiz.com/Portals/0/Images/GettyImages-1992829736-1.jpg?ver=bI85ElNyF_cjZqtFhPFqOw%3d%3dOn April 23, the U.S. Department of Labor (DOL) issued its final rule regarding the salary threshold for overtime exemptions under the Fair Labor Standards Act (FLSA).2024-05-02T17:00:00-05:00On April 23, the U.S. Department of Labor (DOL) issued its final rule regarding the salary threshold for overtime exemptions under the Fair Labor Standards Act (FLSA). The final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” makes changes to salary requirements for highly compensated employees (HCEs) and exempt employees and extends overtime protections.Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo