On April 26, 2024, the U.S. Department of Labor (Department) published a final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, to update and revise the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees. Revisions included increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for updating these earnings thresholds to reflect current earnings data. On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the Department’s 2024 final rule. Consequently, with regard to enforcement, the Department is applying the 2019 rule’s minimum salary level of $684 per week and total annual compensation requirement for highly compensated employees of $107,432 per year. Lawsuits regarding the 2024 final rule are currently pending in two other federal district courts, and the United States has filed a notice of appeal from the November 15 decision. The Department will update this notice with additional information as it becomes available.
The Department’s regulations require executive, administrative, and professional (EAP) employees to be paid at least a minimum salary amount to be exempt from the Fair Labor Standards Act’s minimum wage and overtime requirements under section 13(a)(1). In April 2024, the Department issued a final rule increasing the standard salary level for exemption, and the total annual compensation requirement for highly compensated employees, as detailed below.
| Earnings Threshold | Minimum Salary Amount Before July 1, 2024 | Minimum Salary Amount Beginning July 1, 2024 | Minimum Salary Amount Beginning January 1, 2025 |
|---|---|---|---|
| Standard Salary Level | $684 per week (equivalent to a $35,568 annual salary) | $844 per week (equivalent to a $43,888 annual salary) | $1,128 per week (equivalent to a $58,656 annual salary) |
| Total Annual Compensation Requirement for Highly Compensated Employees (HCEs) | $107,432 per year, including at least $684 per week paid on a salary or fee basis | $132,964 per year, including at least $844 per week paid on a salary or fee basis | $151,164 per year, including at least $1,128 per week paid on a salary or fee basis |
| Special Salary Level for Employees in Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands (CNMI) | $455 per week (equivalent to a $23,660 annual salary) | $455 per week (equivalent to a $23,660 annual salary) | $455 per week (equivalent to a $23,660 annual salary) |
| Special Salary Level for Employees in American Samoa | $380 per week (equivalent to a $19,760 annual salary) | $380 per week (equivalent to a $19,760 annual salary) | $380 per week (equivalent to a $19,760 annual salary) |
| Special Base Rate for Employees in the Motion Picture Industry | $1,043 per week (or a proportionate amount based on the number of days worked) | $1,043 per week (or a proportionate amount based on the number of days worked) | $1,043 per week (or a proportionate amount based on the number of days worked) |
| Compensation Required for Computer Employees Paid on an Hourly Basis | $27.63 per hour | $27.63 per hour | $27.63 per hour |
Note: These earnings thresholds do not apply to certain types of employees, including doctors, lawyers, teachers, and outside sales employees.