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04.25.24
The U.S. Department of Labor has issued final regulations that increase the minimum salary level needed for the white-collar exemption and the annual compensation threshold needed to be considered a Highly Compensated Employee under the Fair Labor Standards Act. (The white-collar exemptions are also known as the Executive-Administrative-Professional, or “EAP,” exemptions.)
In almost all cases, there are also job duties requirements that must be satisfied for the exemptions to apply, but those duties requirements are not affected by the changes resulting from this rulemaking proceeding.
Increase in compensation thresholds will be phased in
The DOL is implementing its minimum level thresholds in a manner different from what it specified in its original proposal, issued in 2023. The final regulations provide for initial updates to the standard salary level and the total annual compensation threshold. These initial updates will take effect on July 1. On that date,
- The weekly salary threshold will increase from its current $684 per week to $844 per week.
- The annual compensation threshold for the Highly Compensated Employee exemption will increase from $107,432 to $132,964.
The July 1 compensation levels will increase again on January 1, 2025:
- The weekly salary threshold will increase to $1,128 per week, or $58,656 per year.
- The annual compensation threshold for a Highly Compensated Employee will increase to $151,164.
The DOL set the minimum salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest Census Region (South), and the total annual compensation threshold at the annualized weekly earnings of the 85th percentiles of full-time salaried workers nationally.
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