The U.S. Department of Labor recently announced a new salary threshold for employees classified as exempt from overtime pay requirements under the Fair Labor Standards Act (FLSA). These new thresholds are also applicable under Massachusetts wage law.
Under the FLSA and Massachusetts law, employers must pay overtime for all hours that are worked above 40 hours in a workweek, unless the employee is subject to a specified exemption under the statute. The so-called "white-collar" exemptions apply to executive, administrative or professional employees who receive a fixed and predetermined salary, meet a certain salary threshold, and perform executive, administrative, or professional duties. There is also an exemption for highly compensated employees.
- Effective July 1, 2024, the annual salary threshold for exempt executive, administrative or professional employees will increase from $35,568 to $43,888. Effective January 1, 2025, the threshold will increase again to $58,656.
- Effective July 1, 2024, the annual salary threshold for exempt highly compensated employees will increase from $107,432 to $132,964. Effective January 1, 2025, the threshold will increase again to $151,164.
- Starting July 1, 2027, the salary thresholds for exempt employees will automatically update every three years, based on wage data at the time of the update.
Although there is pending federal litigation seeking to block the implementation of this rule, as of today's date, the rule remains set to go into effect on July 1, 2024. Employers should review their exempt employees and take steps to ensure compliance with the new salary thresholds.
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