On April 23, 2024, the United States Department of Labor (“DOL”) released a final rule on overtime exemption. This final rule will increase the minimum salary amount required to be paid to executive, administrative and professional (“EAP”) employees to be considered exempt from the Fair Labor Standards Act (“FLSA”) overtime pay requirements.
Currently, to fall within the FLSA’s employee exemptions an employee generally must be (1) paid a salary, (2) be paid at least a specified weekly salary level, and (3) primarily perform executive, administrative or professional duties, as provided in the DOL’s regulations.
The new rule raises the standard salary threshold for white-collar exemptions from $684 a week ($35,568 annualized) to $844 a week ($43,888 annualized), then to $1,128 a week ($58,656 annualized). These changes require careful planning, especially for employers with exempt employees earning below these new thresholds.
Practically speaking, given that California has stricter, more employee friendly rules and regulations than FLSA, the DOL’s new salary thresholds will not mean too much for California employers. But the FLSA’s updates potentially have massive effects on out-of-state employers. Those employers must meet specific duties requirements to qualify for these exemptions. The executive, administrative, and professional exemptions each have distinct criteria involving management responsibilities, decision-making duties, and advanced knowledge.
MNK Law will continue to monitor the implementation of the final rule. For more information as to how the new DOL salary threshold affects your business, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
