DOL is raising thresholds for federal overtime exemptions

NEWS:  The Department of Labor (DOL) released rules this week that will raise the salary thresholds for certain overtime exemptions under the federal Fair Labor Standards Act (FLSA). The changes mean that about 4 million employees around the country will become eligible for overtime pay. As one national law firm put it, “Employers must therefore either raise the salaries paid to such employees to maintain the exemption or reclassify their positions to non-exempt, paying them an hourly wage and overtime, where applicable.”
 
The FLSA generally requires covered employers to pay employees a federal minimum wage and, for employees who work more than 40 hours in a week, overtime pay of at least 1.5 times an employee’s regular rate of pay. But the FLSA exempts certain employees from its overtime requirements if they work in a bona fide “executive, administrative, or professional” (EAP) capacity, as those terms are defined in DOL regulations. The definitions include a salary threshold. The DOL’s rules also provide an alternative test for certain “highly compensated employees” who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.
 
Currently, the salary EAP threshold is $684 per week ($35,568 per year). The threshold for highly compensated employees is $107,432 per year.
 
Beginning July 1, 2024, the rules will increase the EAP threshold to $844 per week ($43,888 per year). They will also raise the annual compensation threshold for highly compensated employees to $132,964 per year.
 
Beginning January 1, 2025, the rules will raise the EAP threshold to $1,128 per week ($58,656 per year). They will also raise the annual compensation threshold for highly compensated employees to $151,164 per year.
 
Beginning July 1, 2027, and every three years after that, the salary thresholds will automatically update.
 
For details, please see this Legal Update from the Husch Blackwell law firm. They are The League’s outside counsel and handle credit union employment law questions via our HR Legal Line.
 
The DOL’s Wage and Hour Division offers various resources on the new federal rules.
 
The Wisconsin Department of Workforce Development offers this page with information and FAQs on Wisconsin’s state laws related to hours of work and overtime.