DOL Changes Exempt Salaried Amount & HCE Amount Too (Effective July 1, 2024)

DOL Exempt Changes 2024

Effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888 (it was $684 per week or $35,578 per year) and then another increase to $58,656 on Jan. 1, 2025.

  • The July 1 increase updates the present annual salary threshold of $35,568 based on the methodology used by the prior administration in the 2019 overtime rule update.
  • On Jan. 1, 2025, the rule’s new methodology takes effect, resulting in the additional increase. In addition, the rule will adjust the threshold for highly compensated employees.
  • Starting July 1, 2027, salary thresholds will update every three years, by applying up-to-date wage data to determine new salary levels.

Key provisions of the final rule include the following:

  • Expanding overtime protections to lower-paid salaried workers.
  • Giving more workers pay or valuable time back with their family: By better identifying which employees are executive, administrative or professional employees who should be overtime exempt, the final rule ensures that those employees who are not exempt receive time-and-a-half pay when working more than 40 hours in a week or gain more time with their families.
  • Providing for regular updates to ensure predictability. The rule establishes regular updates to the salary thresholds every three years to reflect changes in earnings. This protects future erosion of overtime protections so that they do not become less effective over time.

The highly compensated exemption (HCE) total annual compensation level will increase from its current $107,432 per year to $132,964 per year on July 1, 2024 and then another increase on Jan. 1, 2025 to $151,164 per year.

This link below gives a really great overview of the changes including a video and links to charts.

https://www.dol.gov/agencies/whd/overtime/rulemaking

The official Final Rule can be found here.

Please let me know if you need any help. If you have any salaried employees, you must change their compensation to be at least $43,888 as of July 1st 2024, then to $58,656 on January 1st 2025. (it was $35,578 per year) or make them hourly. Just be consistent with same/ similar role – they should have the same status (hourly or salaried).

Picture of Wendy Sellers
Wendy Sellers
Wendy Sellers, known as “The HR Lady®,” is a dedicated HR consultant and business partner of all size businesses, a conference speaker, and management trainer who specializes in understanding the unique culture and goals of organizations in order to improve business outcomes.

Sign up for email updates from Wendy Sellers, The HR Lady LLC.

Share:

Facebook
Twitter
Pinterest
LinkedIn