{"id":10062,"date":"2026-03-25T05:16:01","date_gmt":"2026-03-25T05:16:01","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/u-s-department-of-labor-proposes-to-significantly-raise-the-salary-threshold-for-exempt-employees\/"},"modified":"2026-03-25T05:16:01","modified_gmt":"2026-03-25T05:16:01","slug":"u-s-department-of-labor-proposes-to-significantly-raise-the-salary-threshold-for-exempt-employees","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/u-s-department-of-labor-proposes-to-significantly-raise-the-salary-threshold-for-exempt-employees\/","title":{"rendered":"U.S. Department of Labor Proposes to Significantly Raise the Salary Threshold for Exempt Employees"},"content":{"rendered":"\n<div id=\"contentSummaryCollapse\" style=\"--intro-p-height: 10.3125rem;\">\n<div class=\"inner-collapse\">\n<p><b>November 18, 2024 Update. <\/b>On November 15, 2024, the U.S. District Court for the Eastern District of Texas issued an order finding that the DOL\u2019s increased salary thresholds for the executive, administrative, and professional exemptions to the FLSA\u2019s overtime requirement \u201cexceeded the authority delegated by Congress\u201d and \u201c\u2018effectively eliminates\u2019 consideration of whether an employee performs \u2018bona fide executive, administrative, or professional capacity\u2019 duties in favor of what amounts to a salary-only test.\u201d Accordingly, the court vacated the rule imposing the increased salary thresholds described below. As a practical matter, this means the salary thresholds for the executive, administrative, and professional FLSA exemption tests return to the pre-July 2024 levels of $684 per week ($35,568 per year), or $107,432 per year for highly compensated employees. The January 2025 increases, and subsequent automatic increases, will not go into effect at this time.<\/p>\n<p><strong>April 24, 2024\u00a0Update.\u00a0<\/strong>On April 23, 2024, the DOL announced its final rule increasing the salary threshold for overtime exemptions under the FLSA.\u00a0 Under the Final Rule, the salary thresholds for the white-collar exemptions (i.e., for executive, administrative and professional employees) will rise from $684 per week ($35,568 per year) to $844 per week ($43,888 per year) on July 1, 2024, and to $1,128 per week ($58,656 per year) on January 1, 2025.\u00a0 In addition, the salary threshold for the highly compensated employee exemption will rise from $107,432 per year to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025.\u00a0 The Final Rule provides that these figures will be updated automatically every three years based on the latest wage data.<\/p>\n<p>On August 30, 2023, the U.S. Department of Labor (\u201cDOL\u201d) issued its long-anticipated proposed rule to increase the salary threshold for exemptions under the Fair Labor Standards Act (\u201cFLSA\u201d)\u2014a proposal that is estimated to make more than three million workers eligible for overtime pay when they work more than 40 hours per week. The proposal includes the following significant changes:<\/p>\n<ul>\n<li>An increase to the salary thresholds for the white-collar exemption, from $684 per week ($35,568 per year) to $1,059 per week\u2014meaning that employees would need to earn at least $55,068 per year to be exempt from overtime pay under this exemption.\u00a0 The DOL estimates that this change will impact 3.6 million white-collar workers in the first year after the Proposed Rule is enacted.<\/li>\n<li>An increase to the salary thresholds for the highly compensated employee exemption from $107,432 per year to $143,998. The DOL estimates that this change will impact 248,900 workers upon enactment.<\/li>\n<li>Automatically update the salary thresholds every three years to reflect current earnings data.<\/li>\n<\/ul>\n<h3>Background<\/h3>\n<p>The FLSA requires employers to pay covered employees time and one-half their regular hourly wage rate for all hours worked in excess of 40 in any workweek. The Act exempts from overtime requirements \u201cany employee employed in a bona fide executive, administrative, or professional capacity,\u201d <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/29\/213\" rel=\"nofollow noopener\" target=\"_blank\">29 U.S.C. \u00a7 213(a)(1)<\/a>, commonly referred to as the white-collar exemptions. The DOL is charged with interpreting this exemption and, since the 1940s, has included a \u201csalary-level\u201d test, in addition to a duties test, as part of its regulations prescribing which employees fall within the white-collar exemptions.<\/p>\n<p>The DOL\u2019s recent Proposal is the latest in a long series of efforts to increase the salary thresholds.\u00a0 During the Obama administration, the DOL attempted to increase the salary thresholds via the rulemaking process, issuing a Final Rule in May 2016. (See our May 31, 2016 memorandum for more discussion of the 2016 rule.) \u00a0\u00a0On November 22, 2016, Judge Amos Mazzant of the Eastern District of Texas temporarily enjoined the regulations on a nationwide basis. <u>Nevada<\/u> v. <u>U.S. Dep\u2019t of Labor<\/u>, 218 F. Supp. 3d 520 (E.D. Tex. 2016). Judge Mazzant held that \u201cthe Department exceed[ed] its delegated authority and ignore[d] Congress\u2019s intent by raising the minimum salary level such that it supplants the duties test.\u201d Id. at 530. (<i>See<\/i> our November 29, 2016 memorandum for more discussion of Judge Mazzant\u2019s decision.) By Order dated August 31, 2017, Judge Mazzant permanently enjoined the regulations. <u>Nevada<\/u> v. <u>U.S. Dep\u2019t of Labor<\/u>, 275 F. Supp. 3d 795 (E.D. Tex. 2017). (<i>See<\/i> our September 5, 2017 memorandum for more discussion of Judge Mazzant\u2019s decision.) The DOL appealed the original temporary injunction ruling to the Fifth Circuit but, after the change in Presidential administrations, the DOL informed the Fifth Circuit that it intended to implement revised overtime regulations through notice-and-comment rulemaking, the end result of which are currently in place.<\/p>\n<h3>Next Steps<\/h3>\n<p>The DOL\u2019s Proposed Rulemaking will be <a href=\"https:\/\/www.dol.gov\/newsroom\/releases\/whd\/whd20230830#:~:text=WASHINGTON%20%E2%80%93%20The%20U.S.%20Department%20of,week%2C%20about%20%2455%2C000%20per%20year.\" rel=\"nofollow noopener\" target=\"_blank\">open to public comment<\/a> for 60 days once it is\u00a0 published in the Federal Register.\u00a0 Given the anticipated volume of comments on this rule, the DOL may extend the 60-day comment period.\u00a0 The DOL is then required to review the comments prior to the issuance of any final rule.\u00a0<\/p>\n<p>If, after taking the comments into account, the DOL ultimately elects to enact a final rule in a form that is substantially similar to the Proposed Rulemaking, the enactment is unlikely to occur until sometime in 2024.\u00a0 It is anticipated that any such rule will also be challenged in court immediately upon enactment\u2014similar to what occurred in connection with the rule that was proposed during the Obama administration.\u00a0\u00a0<\/p>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>November 18, 2024 Update. On November 15, 2024, the U.S. District Court for the Eastern District of Texas issued an order finding that the DOL\u2019s increased salary thresholds [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10063,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[462,676,4677,3276,1542,3893,2409,7599,7600,272],"class_list":["post-10062","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-department","tag-employees","tag-exempt","tag-labor","tag-proposes","tag-raise","tag-salary","tag-significantly","tag-threshold","tag-u-s"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10062","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10062"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10062\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10063"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}