DOL Finalizes Salary Threshold for ‘White Collar’ Exemption

On April 23, the U.S. Department of Labor (DOL) announced a final rule to increase the minimum salary level for the Fair Labor Standards Act “white collar” exemptions in two steps:

• On July 1, the minimum salary level increases from $684 to $844 per week (or from $35,568 per year to $43,888 per year)
• On January 1, 2025, the minimum salary level increases from $844 to $1,128 per week (or from $43,888 per year to $58,656 per year)

The final rule also requires the salary level be updated every 3 years to match the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. This means that on July 1, 2027, and every 3 years after, the salary level will be updated.

The final rule is scheduled for publication in the Federal Register on April 26.

HCE Salary Requirements

The final rule increases the salary requirement for highly compensated employees (HCEs) from $107,432 to $132,964 per year on July 1, then from $132,964 to $151,164 per year on January 1, 2025. The HCE level also will be adjusted every 3 years at the same time as the salary threshold.

Complete coverage of the final rule will be in the May issue of Payroll Currently.

For More Information

For more information, see the PAYO Compliance Update, DOL Finalizes Salary Threshold for ‘White Collar’ Exemption. Compliance updates are emailed to PayrollOrg members and are also available on the Compliance Updates webpage.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!

Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Senior Manager of Payroll Information Resources for PayrollOrg.