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ALERT: US Department of Labor Increases Salary Threshold for White Collar Overtime and Minimum Wage Exemptions

Apr 26, 2024

By: Trevor Brice, Esq.


On April 23, 2024, the U.S. Department of Labor (“DOL”) announced a Final Rule updating regulations governing Executive, Administrative and Professional exemptions (“EAP exemptions”) from the minimum wage and overtime rules. This Final Rule significantly increases the salary threshold for workers to qualify for EAP exemptions. In general, to qualify for EAP exemptions, an employee must 1) be paid on a salary basis, 2) at a threshold level, and 3) primarily perform EAP duties as defined by the DOL. The Final Rule does not impose any changes on the salary basis or job duties relevant in determining EAP exemptions.


After issuance of a proposed rule that received approximately 33,000 comments, the DOL in the Final Rule is increasing the salary thresholds in waves. As of July 1, 2024, the salary threshold for EAP exemptions applies to employees making $844 per week ($43,888 annually) on a salary basis. As of January 1, 2025, the threshold increases to $1,128 per week ($58,656 annually). This means that employees making under these amounts on a salary basis as of these dates are no longer exempt from overtime, as long as the other criteria for determining EAP exemptions by the DOL are met.


Additionally, the rule increases the salary threshold for the “highly compensated” employee exemption. This exemption applies when an employee meets the greater salary threshold, their primary duty includes performing office or non-manual work and the employee customarily and regularly performs at least one of the duties or responsibilities defined in the EAP exemptions. The DOL also issued the increased salary threshold for the highly compensated exemption in waves. As of July 1, 2024, the salary threshold for the highly compensated employee exemption applies to employees making $132,964 annually, including at least $844 per week paid on a salary or fee basis. As of January 1, 2025, the salary threshold for the highly compensated employee exemption raises to $151, 164 annually, including at least $1,128 per week on a salary or fee basis.


The DOL estimates that under the Final Rule, there will be four million workers newly entitled to overtime protection as of 2025. As with the FTC’s Final Rule passed on the same day, the DOL’s Final Rule will most likely be subject to challenge through the court system. However, for employers concerned with this new rule, it would be prudent to identify those positions below or close to the new salary thresholds, consider whether to change salaries given the new thresholds and conduct training as to who will now be exempt under the DOL’s final rule. If there is any gray area as to the DOL’s final rule, reach out to the local employment and labor counsel to determine if there is potential liability.


Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

ALERT: EEOC Releases Workplace Guidance to Prevent Harassment

01 May, 2024
On April 29 th , 2024, the U.S. Equal Opportunity Commission (EEOC) finalized their guidance in harassment in the workplace after receiving and responding to nearly 38,000 public comments on the proposed guidance released on October 2, 2023. The renewed guidance provides numerous clarifying hypotheticals, and addresses more recent issues including protections for LGBTIQA+ employees and remote work. Of note, the EEOC clarified the scope of sex discrimination and harassment, stating that federal protections under Title VII extend to LGBTIQA+ employees. Specifically, the EEOC made clear that the scope of harassment extends to repeatedly and intentionally misgendering employees or denying access to bathroom facilities that align with their gender identity. Further, this guidance reminds employers that discrimination and harassment based on “sex” includes harassment based on pregnancy, childbirth and related medical conditions, which include employees’ decisions related to contraception and abortion. Several public comments suggested that these guidelines infringed on free speech and religious rights. The EEOC did not directly address these concerns, instead stating that free speech and religious rights issues are fact-specific and would be addressed on a case-by-case basis. Further, the EEOC updated guidance related to the remote work environment. The EEOC clarified that conduct in a virtual work environment, including electronic communications using private phones, computers, or social media accounts can contribute to a hostile work environment if they impact the workplace. The EEOC also clarified that conduct occurring outside of the workplace, including on social media, which does not target the employer or its employees and is not brought into the workplace generally will not contribute to a hostile work environment. Finally, the EEOC updated its Anti-Harassment Policy Requirements, stating that an anti-harassment and discrimination policy should be widely disseminated to employees, in a manner that is understandable by all employees and includes i) a definition of prohibited conduct, ii) a requirement that supervisors report harassment, iii) multiple avenues for reporting harassment, iv) a statement that clearly identifies accessible points of contact for reporting purposes, and v) an explanation of the complaint process, including adequate anti-retaliation and confidentiality protections, and prompt and effective investigation and corrective action. You can read more about the EEOC's ruling on their website by clicking here . If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.

Non-Compete Agreements Are in Jeopardy

26 Apr, 2024
On April 23, 2024, the Federal Trade Commission (“FTC”) issued a final rule banning non-competition agreements for all employees except for very narrow exceptions. The FTC’s Final Rule banning all non-competition agreements is effective 120 days after its publication in the Federal Register, which is expected in the next few days.  As of the effective date, all non-competition agreements are banned, except for franchisor/franchisee relationships and for sales of a business between buyer and seller. The FTC’s Rule is retroactive, prohibiting certain non-competition agreements before the effective date of the Rule as well. Existing non-competition agreements can remain in effect as to senior executives, which are defined in the Rule as employees in “policy-making positions” making at least $151,164 annually. The FTC’s Final Rule is already being challenged through the court system and a challenge from the Chamber of Commerce will most likely follow suit. Therefore, if an employer has existing non-competition agreements, the employer may not need to rescind them just yet. Stay tuned for updates as these challenges take their due course.
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