Updates to The FLSA Overtime Rules
On April 23, 2024, the U.S. Department of Labor announced a final rule that updates and revises the overtime pay requirements of The Fair Labor Standards Act including increases to the standard salary level and highly compensated employee total annual compensation threshold.
Overtime Pay
Employees are exempt from the Fair Labor Standards Act’s minimum wage and overtime protections if they are employed in a bona fide executive, administrative, or professional (EAP) capacity, as those terms are defined in the Department’s regulations at 29 CFR part 541. To fall within the EAP exemption, an employee generally must meet three tests:
be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed;
be paid at least a specified weekly salary level; and
primarily perform executive, administrative, or professional duties, as provided in the Department’s regulations.
The Standard Salary Level increased as follows:
Effective July 1, 2024, from $684 per week/$35,568 annual/full-time worker to $844 per week/$43,888 annual.
Effective January 1, 2025 increases to $1,128 per week/$58,656 annual.
Effective July 1, 2027 and every three years thereafter, to be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.
Highly Compensated Employee Total Annual Compensation Threshold. Under the current FLSA regulations, a highly compensated employee customarily and regularly performs at least one of the exempt duties or responsibilities of an executive, administrative or professional employee and primary duties including office or non-manual work.
Effective July 1, 2024, total annual compensation increased from $107,432 with at least $684 weekly on a salary or fee basis to $132,964 with at least $844 weekly on a salary or fee basis.
Effective January 1, 2025 increases to $151,164 with at least $1,128 weekly on a salary or fee basis.
Effective July 1, 2027 and every three years thereafter, to be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.
Resources:
https://www.dol.gov/agencies/whd/overtime/rulemaking
https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-541