US Department of Labor
Increase in the FLSA Salary Exemption Threshold
On April 23, 2024, the US Department of Labor (DOL) published its final rule which raises the salary threshold under which employees are exempt from overtime requirements within the Fair Labor Standards Act (FLSA). Currently, if an employee earns less than $35,568 ($684 per week) they are eligible for overtime payments (the “salary basis” under the FLSA).
Effective July 1, 2024, any employee who is classified as “exempt” will now be eligible for overtime payments (equal to 1.5x their normal hourly pay rate) if they earn less than $43,888 annually ($844 per week), which then increases to $58,656 annually ($1,128 per week) after January 1, 2025. This increase to the salary basis for the exemption threshold could have financial impacts on employers throughout the country.
Action Required: With the anticipated legal challenges to this rule, there is the potential that this increase will not go into effect on July 1, 2024. If the rule is upheld, employers will need to review each salaried employee to ensure they meet the threshold, and for those that do not, determine the strategy that works for them moving forward, including reclassification.
ARI HR is monitoring the status of this rule and the legal challenges. We will communicate further with all of our clients as the status of this bill changes. ARI HR is here to assist all of our clients with their assessment of options and the reclassification of certain positions should this rule be upheld. Please contact us for further discussion.
As this change takes effect, the ARI Human Resources Team is here to help you interpret guidelines and regulations, to review your current polices, revise polices as necessary, and to any questions you may have. If you would like to learn more about how we can help support your business, contact us.
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