Department of Labor Issues New FLSA Salary Thresholds

The following changes have been announced by the Department of Labor – Wage and Hour Division.  These changes will necessitate a review of job descriptions, potential job changes, changes in scheduling/work hours and pay ranges/pay rates to ensure alignment with the new regulations in determining if a position meets the exemption tests or if positions will need to be reclassified.

Under the Fair Labor Standards Act (FLSA), three tests are used to determine if a position meets one of the exemptions of executive, administrator or professional” and therefore exempt: (1) the employee must be paid a predetermined and fixed salary, (2) that meets or exceeds a certain threshold; and (3) the employee must perform certain defined work responsibilities.

•  Increased the proposed salary threshold for Executive, Administrative and Professional (EAP) employees from $684 per week ($35,568 annually for a full-year worker) to $1,128 per week ($58,656 annually for a full-year worker).

•  The salary threshold for Highly Compensated Employees increases from $107,432 annually to $151,164 annually.

•  Automatic increases every three years to all earnings thresholds.

•  On July 1, 2024, the salary basis for EAP employees will be at least $844 per week ($43,888 annually) and at least $132,964 per year for HCEs.

•  Effective January 1, 2025, the $1,128 per week ($58,656 annually for a full-year worker) and $151,164 annually for HCEs for EAP employees will apply as of January 1, 2025.

 Important to note is the intersection with state and local wage laws which may need to be coordinated with the FLSA regulations,

 We are available to answer any questions you may have, create and review existing job descriptions, and conduct salary audits and compensation studies.