Earnings Thresholds for FLSA Overtime Exemptions

The U.S. Department of Labor (DOL) has updated the Fair Labor Standards Act (FLSA) overtime regulations, significantly impacting employee eligibility for overtime pay. These changes focus on adjusting the salary thresholds for exempt employees in executive, administrative, or professional roles who are not entitled to overtime pay. Key Changes to Overtime RegulationsStandard Salary Level Increase:

• Effective July 1, 2024: The minimum salary required for exemption increased from $684 per week ($35,568 annually) to $844 per week ($43,888 annually).

• Effective January 1, 2025: This threshold will rise again to $1,128 per week ($58,656 annually). (S. Department of Labor)

Highly Compensated Employees (HCE) Threshold

:

• Effective July 1, 2024: The total annual compensation requirement for HCEs increased from $107,432 to $132,964, which includes at least $844 per week paid on a salary or fee basis.

• Effective January 1, 2025: This threshold will increase to $151,164 annually, with at least $1,128 per week paid on a salary or fee basis. (S. Department of Labor)

Automatic Updates

: Beginning July 1, 2027, the DOL will update these salary thresholds every three years to reflect current earnings data, ensuring the thresholds remain aligned with economic conditions. (U.S. Department of Labor)

Impact on Employers and Employees

These revisions aim to extend overtime protections to more workers and ensure fair compensation for hours worked beyond the standard 40-hour workweek. Employers may need to evaluate and adjust their payroll practices, potentially reclassifying certain positions or modifying salaries to comply with the new thresholds. Employers and employees can refer to the DOL's official resources for detailed information and guidance. (U.S. Department of Labor)   Executive Partner Chris WhiteEQUES® Law Group