By YEO & YEO, MNLA’s Accounting Firm
On April 23, 2024, the U.S. Department of Labor announced a final rule for defining the exemptions from minimum wage and overtime pay requirements for Executive, Administrative, and Professional (EAP) employees, which will take effect on July 1, 2024.
Why it matters: For an employee to be exempt from being paid overtime (i.e., not eligible) they must: (1) be paid a salary; (2) be paid a salary above a specified threshold; and (3) meet the defined duties of the specific exemption such as executive, administrative or professional (often referred to as “white collar” exemptions). These exemptions are important because non-exempt employees must be paid time and a half for any time worked past 40 hours a week.
Final rule
The final rule takes effect July 1, 2024, and increases the standard salary level for the EAP exemption and adjusts the highly compensated employee total annual compensation threshold. The Department of Labor estimates that during the first year, four million workers will become newly entitled to overtime under the final rule.
Standard salary level for EAP exemption
Under the final rule, the standard salary level for the EAP exemption increases from $684 per week to:
- $844 per week, effective July 1, 2024, and
- $1,128 per week, effective January 1, 2025
For more information, refer to the U.S. Department of Labor’s website page, Final Rule: Restoring and Extending Overtime Protections.
*MNLA is working with our national partners on this and will let you know if there are any changes to this rule and/or the implementation date.