Overtime and Minimum Wage Changes

More employees may qualify for minimum wage and overtime protection due to recent changes to the Fair Labor Standards Act (FLSA).

Employees are currently exempt from the FLSA’s minimum wage and overtime requirements if they are employed in a bona fide “executive,” “administrative,” or “professional” capacity and are paid a salary of a minimum weekly amount.  The regulations also provide an alternative test for “highly compensated employees” who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.

On April 23, 2024, the U.S. Department of Labor announced a final rule increasing the standard salary level and the highly compensated employee total annual compensation threshold and a mechanism that updates these earnings thresholds to reflect current earnings data. 

This rule will increase the salary level and the highly compensated employee's total annual compensation threshold on July 1, 2024, and again on January 1, 2025.  These scheduled increases are as follows:

A similar attempt in 2016 to increase the salary thresholds was struck down in federal court. Before the appeal was heard, the rule was withdrawn by the Trump Administration.  Legal challenges to the agency’s rule making authority are again expected.  However, given the July 1 compliance deadline, we recommend you review your exempt employee’s current salaries and determine whether any increases might be necessary to comply with the rule.

Woods Fuller's Labor and Employment Law attorneys help businesses protect and manage their workforce in today’s challenging employment environment. We provide experienced counsel in the face of constantly changing law policies and regulations. For information on how this new policy will affect your business, contact our Labor and Employment Law team.