DOL Issues Final Rule Raising Salary Threshold For Exempt Employees

On April 23, 2024, the U.S. Department of Labor (DOL) issued its much-anticipated final rule raising the salary threshold for employees to be exempt from federal overtime requirements under the Fair Labor Standards Act (FLSA). The new rule significantly increases the minimum salary requirement for executive, professional, and administrative employees (aka "white-collar workers"), effective July 1, 2024.

Currently, to be exempt from federal overtime requirements under the FLSA, a white-collar worker must – in addition to satisfying the applicable "duties" test – receive a guaranteed base salary of at least $684 per week ($35,568 per year). The rule increases this minimum salary threshold, initially to $844 per week ($43,888 per year) as of July 1, 2024, and then to $1,128 per week ($58,656 per year) as of January 1, 2025. Thereafter, the rule provides for an automatic update to the threshold every three years based on wage data.