Employers Should Check Salary Thresholds for Exempt Employees Before July 1

Employers should check before July 1 to ensure they are in compliance with the minimum salary levels required for their exempt employees. On July 1, the minimum salary level for exempt employees increases from $684 to $844 per week as changes made to the Fair Labor Standards Act (FLSA) executive, administrative, professional, outside sales, and computer employee (EAP) or “white collar” exemptions go into effect.

On April 23, the U.S. Department of Labor announced a final rule to increase the salary thresholds in two steps (89 F.R. 32842, 4-26-24). The first increase takes place on July 1, and the second increase is on January 1, 2025, when the minimum salary level increases from $844 to $1,128 per week.

Don’t Forget HCEs

The final rule also 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. As part of an exempt HCE’s annual compensation, the employee must receive at least the new standard salary amount of $844 per week on a salary or fee basis on July 1. This threshold increases to $1,128 on January 1, 2025.

More Information

Earlier this month, the DOL hosted a webinar on the final rule and how employers can prepare.

The latest information on the white collar exemptions and other payroll topics is available on the PayrollOrg website in the Hot Topics section under the Compliance tab. The DOL also created FAQs about the final rule.

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.