Effective July 1, 2024, the DOL is implementing amendments to the overtime provisions of the FLSA. The Final Rule: Restoring and Extending Overtime Protections increases the minimum salary required for an employee to qualify for an exemption under the FLSA overtime provisions from $684 to $844 per week (equivalent to $43,888.00 per year) and increases the total annual compensation requirement for “highly compensated employees" from $107,432.00 to $132,964.00 per year.
Effective January 1, 2025, FLSA regulations increase the minimum salary level to qualify for an exemption to $1,128 per week (equivalent to $58,656 per year) or an annualized weekly compensation level of $151,164 for “highly compensated employees."
Beginning July 1, 2027, exemption eligibility thresholds will be updated every three years based on current wage data. No changes were made to the FLSA job duties test.
Agencies have various options for responding to the updated thresholds established in the Rule. For each employee who is affected by the increased earnings threshold, an employer may:
increase the salary of the employee to at least the new salary level to retain their FLSA-exempt status;
pay an overtime premium of one and a half times the employee's regular rate of pay or provide compensatory time off at a rate of not less than one and one-half hours of compensatory time for each hour of overtime work;
reduce or eliminate overtime hours, utilizing schedule adjustments where practical;
reduce the amount of pay allocated to the employee's base salary (provided that the employee still earns at least the applicable hourly minimum wage) to offset new overtime pay; or
use some combination of these responses.