Taking effect July 1, 2024 is the Federal Department of Labor’s increase in the minimum salary thresholds for executive, administrative and professional employees to qualify for the “exempt” classification. Remember that the individuals will still need to meet the “duties” test for each of these qualified exemptions as well. What does this new threshold mean for employers?
Let’s say you’re paying your exempt workers a salary now (i.e., pre-July 1, 2024) at the rate of $684/week ($35,568/year). On July 1, 2024, your choice is to bump their annual salary by $8,320.00 to $844/week ($43,888/year) or start paying overtime for every hour worked over 40 in a workweek.
And just when you’ve adjusted your annual budgets to meet those increases, be prepared for July 1, 2025, when another $14,768 per year increase to meet the weekly minimums will be effective requiring $1,128/week ($58,656/year).
There’s a bit of a reprieve until July 1, 2027, when the feds plan to adjust the earnings thresholds. Beyond that point, the DOL will update the thresholds every three years.
Failure to meet these thresholds may mean the employee is entitled to overtime pay if they work more than 40 hours in a workweek.
Need help figuring this out? Contact an RKW employment lawyer who can discuss options for your business and budget.
