DOL’s final overtime rule increases salary threshold for exempt employees

On April 23, 2024, the U.S. Department of Labor (DOL) published a final rule that raises the minimum salary threshold of the standard exemption from the minimum wage and overtime protections under the Fair Labor Standards Act (FLSA) for executive, administrative, professional, outside sales, and some computer employees. These are often called the EAP or white-collar exemptions. The final rule also increases the total annual threshold for highly compensated employees. As of July 1, an estimated one million salaried and exempt employees could be affected by the threshold change and might become eligible for overtime. And, according to the DOL, another estimated three million could be eligible for overtime when the threshold is raised again on January 1, 2025.

What are the salary thresholds under the new final overtime rule?

The minimum salary threshold for the EAP exemption will increase from its current level of $684 per week (approximately $35,568 per year) to $844 per week (approximately $43,888 per year) on July 1, 2024, and then to $1,128 per week (approximately $58,656 per year) on January 1, 2025. Thus, the new threshold for the EAP exemption will eventually be more than $7,000 larger than its current amount.

The minimum annual compensation threshold for a highly compensated employee will increase from its current level of $107,432 to $132,964 on July 1, 2024, and then to $151,164 on January 1, 2025.