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The U.S. Department of Labor (“DOL”) has issued a final rule formally reversing the 2024 overtime rule that increased the minimum weekly salary that an employee must earn in order to qualify as exempt under the FLSA.
The 2024 rule would have increased the minimum salary to qualify as an exempt executive, administrative, or professional (“EAP”) employee from $684 per week to $844 per week effective July 1, 2024 and to $1,128 per week effective January 1, 2025, with automatic updates every three years thereafter. In addition, the 2024 rule would have increased the total annual compensation threshold for the highly compensated employee (“HCE”) exemption from $107,432 to $132,964 and then to $151,164 thereafter.
The DOL’s action does not set a new salary threshold for the above exemptions. Instead, the DOL restores the 2019 overtime rule text, under which the general salary minimum to qualify for the EAP exemption is $684 per week and the HCE exemption threshold is $107,432 annually.
What does this mean for employers?
For now, the federal salary threshold for most EAP exemptions is back to $684 per week, the same level adopted in the 2019 rule. However, employers should bear in mind that many states, including New York and California, impose higher salary thresholds for exemption under state law, and these may also vary by city or county in some states.
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