Making DOL’s overtime rule changes make cents

On April 23, 2024, the U.S. Department of Labor (DOL) issued its highly anticipated final rule that will raise the standard minimum salary level needed for most white-collar exempt employees on July 1, 2024, and then increase it again beginning January 1, 2025. The final rule will also increase the total compensation minimum for highly compensated employees (HCEs) and will adopt a mechanism to update these thresholds going forward every three years. While there may be legal challenges that prevent the rule from taking effect, employers should still look at their current exemptions and prepare to make adjustments if current salaries fall short of the new minimums.

How did we get here?

Last Fall, the DOL proposed changes to the federal wage law overtime exemption requirements—specifically, the minimum salary for what is commonly referred to as the white-collar overtime exemptions (executive, administrative, and professional exemptions). The proposed changes were published on September 8, 2023, and were open to public comment for 60 days ending November 8.

Since then, employers have been waiting for the DOL to announce the effective date of the changes. Most were making plans to update their exempt salaries where needed, but veteran HR professionals were still a bit wary because in 2016, when the salary minimums were scheduled to be substantially increased, a court blocked the implementation at the last minute.

Two-step around objection