On April 26th, 2024, the U.S Department of Labor published the much-anticipated final rule that will increase the minimum salary for many exempt employees. This new ruling only affects exempt (salaried) employees. For employees to qualify for exemption, they must meet certain tests regarding their job duties and have the revised minimum salary.

The increase will take effect in two steps:

  • STEP #1: $844 per week ($43,888 per year) beginning on July 1, 2024
    STEP #2: $1,128 per week ($58,656 per year) beginning on January 1, 2025

Exceptions and Highly Compensated Employees (HCE)
Teachers, practicing doctors, and lawyers remain exempt from these federal minimum salary requirements but may face differing state minimums. Highly Compensated Employees (HCE) are also subject to increased salary thresholds:

  • $132,964 per year beginning July 1, 2024
  • $151,164 per year beginning January 1, 2025

Future Updates
The rule implements automatic updates to the minimum salary levels every three years starting July 1, 2027. The Department of Labor doesn’t know what the future minimums will be, but employers will have at least 150 days notice before those changes take effect.

What To Do Now? Employers have the following options:

  • OPTION 1: Ensure that salaried exempt employees make at least the new minimum salary required for their classification.
  • OPTION 2: Reclassify exempt employees as nonexempt, offering them rights and benefits such as minimum wage and overtime pay.

Contact us today so that aHRrow’s team can work with you directly to ensure you’re compliant with this new ruling.