New FLSA Salary Threshold Effective July 1st

By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published April 23, 2024

Earlier today the U.S. Department of Labor's Wage & Hour Division announced updates to the Fair Labor Standards Act (FLSA), scheduled to go into effect July 1, 2024. This rule has been submitted to the Federal Register and should be posted on their website shortly. 

Key rule changes:

The updated FLSA rule changes the current salary threshold ($684 per week) to $844 per week ($43,888 annually) for an employee to qualify for the executive, administrative, or professional exemptions (assuming the employee otherwise meets the qualifications for an exemption).

Further, the rule includes an additional step increase to the salary threshold effective January 1, 2025. At that time, the threshold will increase to $1,128 per week ($58,656 annually). Future adjustments will be made to reflect current earnings data. Employers should note the likelihood of an additional increase on July 1, 2027, and every three years thereafter.

The updated rule also includes a new minimum salary level for the highly compensated exemption test. Details can be found on the Wage & Hour Division website. This exemption test is not recognized by the state of Illinois and therefore cannot be utilized by Illinois employers.

HR Source has updated our popular Field Guide to Employee Classification with the new earnings figures.

We will provide educational sessions on this topic and continue to share FLSA resources and information over the next few weeks, including any news on lawsuits challenging the new rule. In the meantime, members may direct questions on this topic to us via the HR Hotline Online or at 800-448-4584.