Buckle Up, Buttercup: Overtime Exemptions Just Got a Raise (and Some Employees Might Too!)

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Remember that overtime exemption for your trusty assistant who somehow manages to keep the office from descending into utter chaos? Well, dust off your wallet, because the Department of Labor (DOL) just made things a tad more interesting (read: expensive) for employers.

On April 23rd, the DOL announced a significant increase to the minimum salary required for an employee to be exempt from overtime pay under the FLSA’s fancy “white-collar exemptions.” That means more employees might be waving goodbye to their exempt status and hello to that sweet, sweet overtime pay.

What exactly does that mean for you?

If you want to continue to avoid paying overtime, here’s the skinny:

  • The new minimum salary jumps to a whopping $844 per week ($43,888 annually) on July 1st, 2024.

  • Then, get ready for another bump to $1,128 per week ($58,656 annually) on January 1st, 2025.

This applies to the executive, administrative, and professional exemptions (with a few exceptions, like lawyers and doctors who are already exempt without a salary test).

But wait, there’s more! This rule might be challenged in court, so stay tuned for any updates.

In the meantime, here’s what you should do:

  • Grab a calculator and dust off those employee files. See if any of your currently exempt employees fall below the new thresholds. Your up-to-date job description for each employee will be beneficial in this analysis. You do have an up-to-date job description, right? 

  • Prepare to reclassify some positions. If you can’t afford the new minimum salary requirements, those currently-exempt employees might need to be switched to non-exempt status. Which means overtime pay for those extra hours.

  • Feeling overwhelmed? Don’t fret! We’re here to help you navigate the new landscape. Just shoot us a message and we’ll be happy to lend a hand (for a reasonable fee, of course).

Oh, and a heads up for our friends on the West Coast: California, Washington, and New York already have higher salary requirements for exemptions, so you can probably skip the calculator in those states. Probably skip.  

So, there you have it. The world of overtime exemptions just got a makeover. Buckle up, employers, because things are about to get interesting!

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