DOL Increases Minimum Salary Level for White-Collar Exemptions

The U.S. Department of Labor (DOL) announced on April 23, 2024 its final rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which amends the regulations interpreting the Fair Labor Standards Act (FLSA). Currently, employers are required to pay employees who are otherwise qualified for an executive, administrative, or provisional exemption (white-collar exemptions) a salary of at least $684 per week (equivalent to $35,568 per year). The final rule announced today provides, in pertinent part, that the standard salary level for white-collar exemptions will increase to $844 per week (equivalent to $43,888 per year) on July 1, 2024, and increase to $1,128 per week (equivalent to $58,656 per year) on January 1, 2025. Furthermore, the DOL warned of future increases on July 1, 2027, and every three years thereafter, to be determined using available data and applying methodology used to set the salary level in effect at that time.

In light of the final rule, employers have only a few weeks to assess their salaried exempt employees and determine whether to increase salaries to meet the new standard. Employers will have to make necessary increases to the salary levels of their corresponding exempt employees if they want to maintain such white-collar exemptions. Salaried employees who do not meet the new minimum salary levels by the deadlines would qualify for overtime pay in the event they work enough hours in a given work week.

The employment team at Conway, Olejniczak, & Jerry S.C. will continue to monitor any developments related to the DOL’s final rule and any subsequent challenges to the final rule. In the meantime, do not hesitate to reach out to one of our team members to discuss the final rule and the impact it may have on your workforce.

Written By:
Attorney Kurt A. Goehre