The U.S. Department of Labor has published a final rule that raises the minimum salary threshold to qualify for the executive, administrative, or professional exemptions from overtime under the Fair Labor Standards Act (“FLSA”).  The final rule also increases the salary requirements for the highly compensated employee exemption and provides for future updates of these levels every three years to reflect current earnings data.

On July 1, 2024, the minimum salary for overtime exemptions will increase to $844 (approximately $43,888 per year).  On January 1, 2025, it will be raised to $1,128 per week (approximately $58,656 per year).

The annual compensation for an employee to qualify for the highly compensated employee exemption increases to $132,964 on July 1, 2024. That threshold is then set to increase again to $151,164 on January 1, 2025.

While the final rule has a significant effect on many employers throughout the country, the rule has a lesser impact on New York State employers as the New York State salary thresholds are considerably higher than the federal threshold.  As of January 1, 2024, the New York State minimum salary thresholds for executive and administrative workers at $62,400 per year ($1200 per week) for New York City and the surrounding areas and $58,458.50 ($1124.20 per week) for the rest of the state.  Nevertheless, New York employers who have employees working in other states should be aware of the increase and should conduct an exemption analysis for those employees in light of the new rule.

Should you have any questions regarding the U.S. DOL’s final rule or how it effects your business, please contact Ali Law Group.

HRtelligence was created by the team at Ali Law Group, LLC.  Should you have any questions or need assistance, please contact Ali Law Group.

#showonalg