Employers should check before July 1 to ensure they are in compliance with the minimum salary levels required for their exempt employees. On July 1, the minimum salary level for exempt employees increases from $684 to $844 per week as changes made to the Fair Labor Standards Act (FLSA) executive, administrative, professional, outside sales, and computer employee (EAP) or “white collar” exemptions go into effect.

On April 23, the U.S. Department of Labor announced a final rule to increase the salary thresholds in two steps (89 F.R. 32842, 4-26-24). The first increase takes place on July 1, and the second increase is on January 1, 2025, when the minimum salary level increases from $844 to $1,128 per week.

Don’t Forget HCEs

The final rule also increases the salary requirement for highly compensated employees (HCEs) from $107,432 to $132,964 per year on July 1, then from $132,964 to $151,164 per year on January 1, 2025. As part of an exempt HCE’s annual compensation, the employee must receive at least the new standard salary amount of $844 per week on a salary or fee basis on July 1. This threshold increases to $1,128 on January 1, 2025.

Courtesy of PayrollOrg.