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| DOL/WHD | RIN: 1235-AA39 | Publication ID: Spring 2024 |
| Title: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees | |
| Abstract: The Department of Labor (Department) proposed to update and revise the regulations issued under the Fair Labor Standards Act implementing the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales, and computer employees. As part of this rulemaking, the Department held a series of stakeholder listening sessions between March and June 2022, to gather input on its part 541 regulations. Stakeholders invited to participate in these listening sessions included representatives from labor unions; worker advocate groups; industry associations; small business associations; state and local governments; tribal governments; non-profits; and representatives from specific industries such as K-12 education, higher education, healthcare, retail, restaurant, manufacturing, and wholesale. Stakeholders were invited to share their input on issues including the appropriate EAP salary level, the costs and benefits of increasing the salary level to employers and employees, the methodology for updating the salary level and frequency of updates, and whether changes to the duties test are warranted. A listening session was held specifically for State and local governments on April 1, 2022, and a session for Tribal governments was held on May 12, 2022. The Department published a final rule on April 26, 2024, that updates the standard salary level and the total annual compensation required for the exemption of highly compensated employees. Under this final rule, beginning July 1, 2024, the standard salary level for bona fide executive, administrative, and professional employees, who are currently required to be paid a salary level of at least $684 per week, must be paid a salary level of not less than $844 per week (equivalent to $43,888 per year). On July 1, 2024, the highly compensated employee (HCE) threshold will also increase from $107,432 to $132,694 annually. Beginning January 1, 2025, the standard salary level will increase from $844 to $1,128 per week, which is based on the 35th percentile of full-time salaried worker earnings in the lowest-wage Census Region (the South), and the HCE threshold will increase from $132,964 to $151,164 annually, which is based on the annualized earnings of the 85th percentile of full-time salaried worker earnings nationwide. The Department also adds to the regulations an updating mechanism to allow for the timely and efficient updating of all the earnings thresholds. On July 1, 2027, and every 3 years thereafter, the standard salary level and HCE total annual compensation requirement will be updated using the methodology in effect at the time of the update. The Department proposed in sections IV.B.1 and B.2 of the NPRM to apply the updated standard salary level to the four U.S. territories that are subject to the federal minimum wage (Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands) and to update the special salary levels for American Samoa and the motion picture industry in relation to the new standard salary level. The Department will address these aspects of its proposal in a future final rule. | |
| Agency: Department of Labor(DOL) | Priority: Section 3(f)(1) Significant |
| RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final Rule Stage |
| Major: Yes | Unfunded Mandates: Private Sector |
| CFR Citation: 29 CFR 541 | |
| Legal Authority: 29 U.S.C. 201 et seq. 29 U.S.C. 213 | |
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Legal Deadline:
None |
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Timetable:
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| Regulatory Flexibility Analysis Required: YES | Government Levels Affected: Federal, Local, State, Tribal |
| Small Entities Affected: Businesses, Governmental Jurisdictions, Organizations | Federalism: No |
| Included in the Regulatory Plan: Yes | |
| RIN Data Printed in the FR: Yes | |
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Agency Contact: Daniel Navarrete Director of the Division of Regulations, Legislation, and Interpretation Department of Labor Wage and Hour Division 200 Constitution Avenue NW, FP Building, Room S-3502, Washington, DC 20210 Phone:202 693-0406 |
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