© 2024 Seyfarth Shaw LLP | www.seyfarth.com Classification Guidebook | 3 An Overview of the FLSA’s Revised Overtime Exemption Rule A. Changes to the Executive, Administrative, and Professional (“EAP”) Exemptions The DOL’s Two-Phased Revision to the EAP Exemptions Will Result in a Salary Level Requirement that is More Than Double the Pre-2024 Standard Effective July 1, 2024, the minimum salary threshold for the executive, administrative, and professional exemptions increased from $684 per week to $844 per week (equivalent to $43,888 on an annual basis) paid on a salary basis (or a fee basis, where permitted) Effective January 1, 2025, the minimum salary threshold increases to $1,128 per week (equivalent to $58,656 on annual basis), paid on a salary basis (or a fee basis, where permitted) The minimum salary level will automatically increase every 3 years, starting in July 2027, based on a cost of living index Up to 10% of the minimum salary threshold may be satisfied through nondiscretionary bonuses, incentive pay, or commissions, if paid annually o If an employee does not earn enough in such payments in a quarter to retain exempt status, the employer may make a “catch-up” payment at the end of the quarter o The employer has one pay period to make up the shortfall (up to 10% of the minimum salary level for the preceding 13-week period) o Any catch-up payment will count only toward the prior quarter’s amount, not toward the salary in the quarter in which it is paid B. Changes to the Highly-Compensated Employee (“HCE”) Exemption The DOL’s Revision Also Increases the HCE Total Compensation Threshold Effective July 1, 2024, the total annual compensation threshold increased to $132,964 Effective January 1, 2025, the total annual compensation threshold increases once more to $151,164 Total annual compensation must encompass a weekly amount of at least the minimum salary level (i.e., $844 per week starting on July 1, 2024; $1,128 per week starting on January 1, 2025) paid on a salary basis (or fee basis, where permitted)—the 10%
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