US DOL Announces Increases to White Collar Salary Test

The US Department of Labor has announced changes to the executive, administrative and professional employees exemption, and more specifically – increases to the minimum salary that must be paid to white collar employees to qualify under these exemptions. These changes have been expected, although the specific minimum salary and dates of implementation were subject to some speculation.

The EAP exemptions, along with the highly compensated employee exemption, exempt employees from the FLSA’s minimum wage and maximum hours requirements. In other words, employees who qualify under these tests do not have to be paid overtime. Each exemption has two tests: a salary test and a duties test. Exempt employees must meet both tests in order to qualify as exempt. The new regulations do not change the duties tests, and are limited to the salary test.

The current minimum salary requirements for executive, administrative and professional employees is $684 per week, which is equivalent to an annual salary of $35,568 per year. The DOL has announced the following increases to take effect on the listed dates:

July 1, 2024                 $844 per week (equivalent to $43,888 per year)

January 1, 2025          $1,128 per week (equivalent to $58,656 per year)

July 1, 2027, and         To be determined by applying to available data the methodology used to

every 3 yrs                  set the salary level in effect at the time of the update.

thereafter

The impact of these changes on the career fire service is not expected to be significant as most high-ranking officers who qualify as exempt under the duties test, should already be well above these minimums. However, part-time and volunteer fire chiefs who previously qualified as exempt executives under the current salary test of $684/week, may no longer qualify for the exemption after July 1, 2024 or January 1, 2025, even though they meet the duties test.

Here is a link to the DOL announcement.