Federal Law Alert

On April 26, 2024 the U.S. Department of Labor (DOL) published the much anticipated final rule that will increase the minimum salary for many exempt employees.

What to do now:

Employers have two options:

• 1. Ensure salaried exempt employees make at least the new minimum salary required for their classification.

• 2. Reclassify currently exempt employees as nonexempt and provide them with the rights and benefits that nonexempt employees are entitled to (e.g. minimum wage and overtime pay).

State Law

As usual, if a state law requires higher minimum salaries than what is required by the federal rule, the state minimums must be followed.

Executive, Administrative, and Professional Employees

Under the new rule, exempt executive, administrative, and professional employees (often referred to collectively as “EAP” employees) must be paid at least:

• $844 per week ($43,888 per year) beginning July 1st, 2024
• $1,128 per week ($58,656 per year) beginning January 1st, 2025

Computer Employees

Exempt computer employees can be paid on a salary or hourly basis. If salaried, these employees are considered part of the EAP group and need to make the minimum listed amount above. Alternatively, they can be paid at least $27.63 per hour, this hourly rate was not changed by the rule.

Highly Compensated Employees (HCE)

Employees who are exempt under the HCE exemption must be paid at least the minimum amount listed above on a salary basis and receive total annual compensation of atleast:

• $132,964 per year beginning July 1st, 2024
• $151,164 per year beginning January 1st, 2025

Exceptions

Teachers, practicing doctors and lawyers are exempt from these minimum salary requirements under federal law but may be subject to different state minimums. School-specific minimums apply to academic administrative employees.