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FLSA Compliance Update - ACTION NEEDED

July 1st arrived and the Department of Labor’s change to the minimum salary required under the Executive, Administrative, and Professional exemptions in the FLSA went into effect.


While previous iterations of an increased salary threshold were stymied by litigation, such as during the Obama Administration, this rule has not been stopped - as of yet.


New Salary Threshold


Before July 1, 2024

Effective July 1, 2024

Weekly

$685

$844

Yearly

$35,568

$43,888

This is the first increase to be applied to EAP employees, and may eventually amount to a near 65% increase in the minimum salary required for “white-collar” exemptions. The update includes changes in the salary threshold for highly compensated employees as well.


One Texas lawsuit has prevented the threshold increase from going into effect, but only for the State of Texas employees. While there are other pending lawsuits, the rule is currently in effect and employers must be in compliance with the new rule.


Immediate Employer Considerations

  • Do you currently have employees that make less than $844 weekly ($43,888 annually) that are classified as exempt?

  • Will you increase salaries or change currently exempt employees to non-exempt?

  • Will increasing employees’ salaries create wage compression with their managers?

  • Will you now restrict hours to prevent exorbitant overtime costs?

  • How will you track employee hours for those recently converted to non-exempt?

  • Do you have a plan for Jan.1, 2025, when the threshold increases to $1,128 weekly ($58,656 annually)?

In addition to the salary calculation, a duties test must still be met in order to classify an employee as exempt from overtime and minimum wage.

 

If you have questions about how to maintain compliance, navigate salary changes and communicate updates to employees, do not hesitate to turn to the HR Maestro for assistance. You can reach Chad at (904) 217-6464 or csorenson@adaptivehrs.com.


 


Adaptive HR Solutions is available to help employers review current agreements and exempt/non-exempt determinations to identify changes that may be necessary. As always, if you have questions, please let us know! 

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