The Fair Labor Standards Act (FLSA) has undergone significant changes over the years, particularly when it comes to minimum salary thresholds. As of 2022, the FLSA minimum salary threshold for exempt employees is $35,568 per year.
This threshold was set by the Department of Labor in 2020, marking a significant increase from the previous threshold of $24,000 per year. This change aimed to ensure that more employees are properly classified as exempt and receive overtime pay when eligible.
The FLSA also allows for some flexibility in determining minimum salary thresholds, such as for employees in certain high-cost areas. For example, the threshold for exempt employees in the District of Columbia is $51,168 per year, which is higher than the national threshold.
These changes can have a significant impact on businesses, particularly those with large numbers of exempt employees.
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Exempt Status and Thresholds
The FLSA has specific rules for exempt status, which means employees are exempt from receiving minimum wage and overtime pay. To qualify as exempt, an employee must meet certain pay thresholds and job duties tests.
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The DOL has changed the pay requirements for employees whose exemption is one of the following: Executive, Administrative, Professional, or Highly Compensated Employee (HCE). These exemptions are typically classified as "white collar" exemptions, even though each has its own job duties test.
The minimum salary threshold for Executive, Administrative, or Professional (EAP) exemption is currently $684 per week, which is $35,568 annualized. The threshold for HCE exemption is $107,432 on an annual basis.
As of July 1, 2024, the minimum salary thresholds will increase to $844 per week ($42,888 annualized) for EAP exemptions and $132,964 annual salary for the HCE exemption. Here's a breakdown of the new thresholds:
Minimum Salary Changes
The minimum salary thresholds for exemptions under the FLSA are changing. As of July 1, 2024, the minimum salary for EAP exemptions will be $844 per week, or $42,888 annualized.
These thresholds will be adjusted every three years, starting from July 1, 2027. The first adjustment after 2024 will be in 2027, but the article doesn't specify the exact amounts.
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The highly compensated employee exemption will require an annual salary of at least $132,964 as of July 1, 2024. This threshold will also be adjusted every three years, starting from July 1, 2027.
As of January 1, 2025, the minimum salary for EAP exemptions will be $1,128 per week, or $58,656 annualized. The highly compensated employee exemption will require an annual salary of at least $151,164.
Here are the minimum salary thresholds as of July 1, 2024 and January 1, 2025:
Frequently Asked Questions
What does FLSA say about minimum wage?
The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour, effective July 24, 2009. This law governs minimum wage requirements for most employees in the United States.
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