The U.S. Department of Labor (DOL) announced on April 23 a final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which will take effect on July 1, 2024.

Starting July 1, 2024, the final rule will require that most salaried workers who earn less than $43,888 ($844 per week) be eligible for overtime pay. Further, under the final rule, the minimum salary for overtime-exempt status will increase again to $58,656 per year ($1,128 per week) on January 1, 2025. The rule will also increase the total annual compensation requirement for the highly compensated employee exemption from $107,432 per year to $132,964 per year on July 1, 2024, and then increase again to $151,164 per year on January 1, 2025.

Further, beginning July 1, 2027, the minimum salary level for exempt status will be updated every three years to keep pace with changes in worker salaries and reflect current earnings data. As always, the increased minimum salaries remain one of several requirements for a proper exempt classification; employees must also continue to primarily perform exempt job duties as defined by the DOL’s regulations.