The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) has issued its updated final rule on overtime pay. Originally proposed by the WHD in September 2023, the Defining and Delimiting the Exemptions for Executive, Administrative, Professional (EAP), Outside Sales and Computer Employees will go into effect on July 1, 2024. However, some portions of the rule will not go into effect until January 1, 2025.
Some employees are exempt from the minimum wage and overtime protections found in the Fair Labor Standards Act (FLSA). These exempt employees include EAP employees, which are those who meet all the following conditions:
- The employees receive a salary.
- The salary is not less than a minimum threshold amount/
- The employee primarily performs executive, administrative, and professional duties.
The final rule changes the EAP salary threshold from $684 per week ($35,568 annually for a full-year hourly worker) to $884 per week ($43,888 annually) as of July 1, 2024. EAP salary threshold will increase to $1,128 per week ($58,656 annually) as of January 1, 2025. This adjustment is almost a 65% increase from the last salary threshold adjustment in 2020. Regarding highly compensated employees, the EAP salary threshold will increase from $107,432 annually to $132,964 annually on July 1, 2024. After that, the EAP salary threshold will increase to $151,432 annually on January 1, 2025.
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