New FLSA Salary Threshold Determined

by David Smith, CAE, Vice President, Compensation Services
Published April 25, 2024

The U.S. Department of Labor (through its Wage & Hour Division) has finalized the Fair Labor Standards Act (FLSA) to include a NEW EARNINGS THRESHOLD effective July 1, 2024. The much-anticipated change adjusts the MINIMUM PAY for an employee to qualify for the Executive, Administrative, or Professional Exemption from Overtime Pay (assuming that they ALSO qualify by “passing” the Duties Tests) from $684.00 per week to $844.00 per week. This means that to be exempt from overtime, EFFECTIVE JULY 1, 2024, a Salaried Employee must be paid “on a salaried basis” at least $43,888 (as opposed to the current annual rate of $35,568).

Additionally, the new rule (barring any changes which might be caused by administrative changes in the November elections) includes an increase in threshold earnings to $1,128.00 per week ($58,656.00 per year) effective January 1, 2025. The new rules also provide for a review and potential increase of threshold earnings every 3 years from July 1, 2024.

Please find a FLSA Exemption Flow Chart for your utilization and feel free to contact us at [email protected] or call us at 616.698.1167 should you have any other questions.