Earnings Thresholds for Overtime Exemption Increased

The Fair Labor Standards Act (FLSA) requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. However, the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. It also exempts certain computer employees. To qualify for exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis as listed below.

In April 2024, the U.S. Department of Labor issued a final rule increasing the standard salary level for exemption, and the total annual compensation requirement for highly compensated employees. The final rule will be effective on July 1, 2024.

Below are new amounts from the Rule. Be sure to review your salaried employees’ compensation prior to July 1, 2024, so you are prepared for any changes. Note that these earnings thresholds do not apply to certain types of employees, including doctors, lawyers, teachers, and outside sales employees.

Earnings Threshold	Current Amount	Minimum Salary Amount Beginning July 1, 2024	Minimum Salary Amount Beginning January 1, 2025
Standard Salary level	$684 per week (equivalent to a $35,568 annual salary)	$844 per week (equivalent to a $43,888 annual salary)	$1,128 per week (equivalent to a $58,656 annual salary)
Total Annual Compensation Requirement for Highly Compensated Employees (HCEs)	$107,432 per year, including at least $684 per week paid on a salary or fee basis	$132,964 per year, including at least $844 per week paid on a salary or fee basis	$151,164 per year, including at least $1,128 per week paid on a salary or fee basis

Earnings Threshold

Current Amount

Minimum Salary Amount Beginning July 1, 2024

Minimum Salary Amount Beginning January 1, 2025

Standard Salary level

$684 per week
(equivalent to a $35,568 annual salary)

$844 per week
(equivalent to a $43,888 annual salary)

$1,128 per week (equivalent to a $58,656 annual salary)

Total Annual
Compensation
Requirement for Highly Compensated
Employees (HCEs)

$107,432 per year,
including at least $684 per week paid on a salary or fee basis

$132,964 per year,
including at least $844 per week paid on a salary or fee basis

$151,164 per year,
including at least $1,128 per week paid on a salary or fee basis

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