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DOL Increases the Minimum Salary for White Collar Overtime Exemptions

dol-increases-the-minimum-salary-for-white-collar-overtime-exemptions

On April 23, 2024, the U.S. Department of Labor (“DOL”) issued a final rule that increases the minimum salary requirements for “white collar” overtime exemptions under the Fair Labor Standards Act (“FLSA”).

The “white collar” exemptions included in the new rule are the executive, administrative, and professional employee exemption and the highly compensated employee exemption.

If you are currently classified as an exempt employee under one of the “white collar” exemptions mentioned above, this rule may cause a change in your exemption status if you do not meet the minimum salary threshold. Companies may misclassify a non-exempt employee as exempt and, as a result, fail to pay overtime wages to individuals who would otherwise be entitled to those benefits. If you believe you have been misclassified as exempt and should receive overtime pay or another benefit under federal or state law, speak with an experienced employee misclassification lawyer to understand your rights better and know what actions are available to protect them.

How Does the 2024 Final Rule Change the Salary Level Requirements?

This new rule is the 2024 Final Rule. The rule will raise the salary threshold level required for the “white collar” exemption to apply and will take effect in two stages over six months: first on July 1, 2024, and second on January 1, 2025. The 2024 Final Rule also accounts for automatic increases to the minimum salary requirements which will begin in 2027.

Previously the minimum salary requirement to qualify under the “white collar” exemption was $684 per week (only $35,568 per year). This means that as long as you were paid a guaranteed salary of at least $684 per week and you met the other requirements of the various exemptions, then you could be classified as “exempt,” or ineligible, for overtime. Now, under the 2024 Final Rule the minimum salary requirement will be:

  • Beginning July 1, 2024: a weekly salary of at least $844 (this equals $43,888 per year)
  • Beginning Jan. 1, 2025: a weekly salary of at least $1,128 (this equals $58,656 per year)

Previously the minimum salary requirement to qualify for the highly compensated exemption was $107,432 per year. Under the 2024 Final Rule, the minimum salary requirement will be:

  • Beginning July 1, 2024: $132,964 per year
  • Beginning Jan. 1, 2025: $151,164 per year

The 2024 Final Rule does not affect the existing duties tests for the “white collar” exemptions.

How Does the 2024 Final Rule Affect Workers?

An increase in the minimum salary threshold will benefit workers because it means that they will be entitled to a higher minimum salary before they can be classified as exempt. In other words, workers should receive a pay much needed pay increase.

When the 2024 Final Rule takes effect in July, 2024, the DOL estimates approximately 1 million employees will no longer be correctly classified as exempt under the white-collar exemptions or high compensated exemption. When the 2nd stage of the new rule takes effect in January, 2025, another 3 million employees will no longer be correctly classified as exempt.

If your salary falls between $684 per week and $844 a week beginning July 1, 2024 (or $1,128 beginning January, 2024) and your salary does not increase to meet the new salary threshold requirements, you are entitled to overtime wages. If you have questions about your entitlement to overtime or if you have been misclassified as exempt, a misclassification attorney to help you understand your rights.

What’s Next? Schedule a Consultation to discuss Questions about Your Pay or Overtime

At Coffman Legal, our experienced misclassification attorneys will listen to your story, answer your questions, and provide you with a thoughtful analysis of any potential legal claims you may have. Our consultations are completely free and entirely confidential. To speak with one of our Ohio misclassification lawyers today, please call 614-949-1181.

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