© 2024 Seyfarth Shaw LLP | www.seyfarth.com Classification Guidebook | 33 1. Sample Internal Announcement You may have heard that the U.S. Department of Labor has updated the rules that define who is entitled to overtime pay under federal law. The key change involves the minimum salary level needed for employees to be considered “exempt” from the minimum wage and overtime pay requirements of the Fair Labor Standards Act, or the “FLSA.” The FLSA is the federal law that requires businesses like ours to pay employees overtime when they work more than 40 hours in a workweek, unless they are exempt. Phase 1 rolled out on July 1, 2024, where exempt employees need to be paid a salary of at least $844 per week (or $43,888 per year) to remain exempt. That number will increase on January 1, 2025, to a salary of at least $1,128 per week (or $58,656 per year.) This is a significant change to the laws that govern how employers pay their employees. Rest assured that we are looking carefully at how these changes may impact our employees and operations. We are developing a plan to account for and adapt to the changes in a way that aligns with our business goals and values and our steadfast efforts to ensure we are treating and compensating our employees fairly and in compliance with applicable laws. We will continue to share information as we move forward in this process. In the meantime, please do not hesitate to contact [HR contact] with any questions. 2. Sample Emails to High-Level Management Shorter-Form Email to VPs, SVPs and Directors TO: VPs, SVPs and Directors RE: Company’s Response to FLSA Overtime/Exemption Changes You may have heard in the news or elsewhere that the U.S. Department of Labor has updated regulations that define who is entitled to overtime pay under federal law. The key change involves the minimum salary level needed for employees to be considered “exempt” from the minimum wage and overtime pay requirements of the Fair Labor Standards Act. The “FLSA” is the federal law that requires businesses like ours to pay employees overtime when they work more than 40 hours in a workweek, unless they are exempt. Currently, employees whose primary duty is an executive, administrative, or professional function may, as a general matter, but must be paid in compliance with the salary rules. Phase 1 rolled out on July 1, 2024, where exempt employees need to be paid a salary of at least $844 per week (or $43,888 per year) to remain exempt. That number will increase on January 1, 2025, to a salary of at least $1,128 per week (or $58,656 per year.) These are significant changes to the laws that govern how we pay our employees. [________] will be undergoing a process to explore our options for exempt employees paid less than $58,656. We expect that the jobs under review will include:
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