Source ADP
On April 23, 2024, the United States Department of Labor (DOL) released a final rule on overtime exemption. This final rule will increase the minimum salary amount required to be paid to executive, administrative and professional (EAP) employees and the required annual compensation to be paid to highly compensated employees (HCEs) in order for these employees to be considered exempt from the Fair Labor Standards Act (FLSA) overtime pay requirements.
The final rule does not include any changes to the standard duties test that is also used to distinguish between FLSA exempt and non-exempt employees.
Background
Currently, to fall within the executive, administrative and professional (EAP) employee exemptions, an employee generally must:
Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the "salary basis test");
Be paid at least a specified weekly salary level; and
Primarily perform executive, administrative or professional duties, as provided in the DOL's regulations (the "duties test").
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