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Labor & Employment Alert: Salary Amounts for Overtime Exemptions Have Been Formally Increased
By Stephen P. Bond & Christopher J. Carney on April 25, 2024
You may be hearing a lot of publicity today about the Federal Trade Commission’s (FTC’s) announced ban on non-compete agreements. However, gaining less attention, but equally important to HR professionals, is an announcement by the Department of Labor:
On July 1, 2024, the Department will update the standard salary level using the existing methodology from the 2019 final rule and current data, raising the salary level from $684 per week to $844 per week (equivalent to $43,888 per year). For highly compensated employees, also following the 2019 methodology, the annual compensation level to be exempt from overtime pay will increase from $107,432 to $132,964.
Those amounts will now increase automatically going forward, to avoid becoming “outdated,” as has occurred in the past. That schedule will work as follows:
| DATE | STANDARD SALARY LEVEL | HIGHLY COMPENSATED EMPLOYEE TOTAL ANNUAL COMPENSATION THRESHOLD |
| Before July 1, 2024 | $684 per week (equivalent to $35,568 per year) | $107,432 per year, including at least $684 per week paid on a salary or fee basis. |
| July 1, 2024 |
$844 per week (equivalent to $43,888 per year)
|
$132,964 per year, including at least $844 per week paid on a salary or fee basis. |
| January 1, 2025 | $1,128 per week (equivalent to $58,656 per year) | $151,164 per year, including at least $1,128 per week paid on a salary or fee basis. |
| July 1, 2027, and every 3 years thereafter | To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. | To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. |
While it remains possible that this change will be challenged in the courts, due to the short window the Labor Department has allowed, the prudent HR Director will take steps to respond to this change now – in general, to maintain existing overtime exemptions, salaries are going to need to be increased by July 1.
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