© 2024 American Payroll Institute, Inc.
May 3, 2024 Volume 32 Issue 5
DOL Finalizes Salary Thresholds for ‘White Collar’ Exemption
On April 23, the U.S. Department of Labor (DOL)
announced a final rule to increase the minimum salary
level for the Fair Labor Standards Act (FLSA) executive,
administrative, professional, outside sales, and computer
employee (EAP) or “white collar” exemptions [89 F.R. 32842,
4-26-24].
The final rule increases the minimum salary level in two
steps:
• On July 1, the minimum salary level increases from
$684 to $844 per week (or from $35,568 per year to $43,888
per year).
• On January 1, 2025, the minimum salary level
increases from $844 to $1,128 per week (or from $43,888
per year to $58,656 per year).
Prior to the final rule, the DOL last updated the EAP
exemption regulations in 2019. That update set the
standard salary level test at $684 per week (or $35,568 per
year) and set the highly compensated employee (HCE) total
annual compensation threshold of $107,432 per year. These
earnings thresholds have been in effect since January 1,
2020.
Levels will be updated
The final rule also requires the salary level be updated
every 3 years to match the 35th percentile of weekly
earnings of full-time salaried workers in the lowest-wage
Census Region. This means that on July 1, 2027, the salary
level will be updated.
The final rule states that updated thresholds will be
published as a notice in the Federal Register not fewer than
150 days before each update is scheduled. The final rule
includes a provision to allow the DOL to temporarily delay
a scheduled update where unforeseen economic or other
conditions warrant.
HCE salary requirements increase
The final rule increases the salary requirement for HCEs
from $107,432 to $132,964 per year on July 1, then from
$132,964 to $151,164 per year on January 1, 2025. The HCE
level also will be adjusted every 3 years.
As part of an exempt HCE’s annual compensation, the
employee must receive at least the new standard salary
amount of $884 per week on a salary or fee basis on July 1.
This threshold increases to $1,128 on January 1, 2025.
Items from the NPRM that did not change
The DOL pointed out a few items were not adopted in
the final rule, although they were in the notice of proposed
rulemaking (NPRM 88 F.R. 62152, 9-8-23 see PAYROLL
CURRENTLY, Issue 9, Vol. 31). These items from the NPRM are
not part of the final rule:
• Applying the standard salary level to the U.S.
territories subject to the federal minimum wage (Puerto
Rico, Guam, the Virgin Islands, and the Commonwealth of
the Northern Mariana Islands). The salary threshold remains
$455 per week.
• Updating the special salary levels for American
Samoa. The salary threshold remains $380 per week.
• Updating salary levels for the motion picture industry.
The special weekly base rate for the motion picture industry
remains $1,043 per week (or a proportionate amount based
DOL Finalizes Salary Thresholds for ‘White Collar’
Exemption.............................................................................................. 1
IRS Data Affirms Payroll’s Vital Role in Nation’s Tax System........ 2
DOL Publishes Report on UI Trust Fund Solvency. .........................3
USCIS Publishes Temporary Rule to Extend EADs to 5 Years....... 3
OCSS Creates Fact Sheet for Lump-Sum Reporting. .....................4
IRS Commissioner Updates the Senate Finance Committee...... 4
Payroll Solutions. ......................................................................................5
2023 EEO-1 Data Collection Due by June 4. ....................................5
Treasury Releases Fiscal Year 2025 Revenue Proposals................ 5
TIGTA Issues Report on ‘Ghost Employers’........................................ 6
2nd Circuit Rules EMTs Owed Overtime for Pre- and Post-Shift
Tasks. .......................................................................................................7
DOJ Releases 2024 COVID-19 Fraud Enforcement Report.......... 9
District Court Rules Employer Willfully Violated FLSA. ...............10
SSA Releases Tax Year 2024 W-2 Electronic Filing Specs. ...........11
IRS Dirty Dozen List Warns Taxpayers of Common Scams. ......11
IRS Encourages Employees to Check Withholding. .....................12
Nacha Amends ACH Operating Rules to Reduce Fraud.............12
7th Circuit Overturns District Court Decision in FMLA Case.....13
Update on DOJ Employment Tax Enforcement Actions............14
State and Local Highlights............................................................. 15
PayrollOrg Issues AI Report on Payroll Processing................ 17
PayrollOrg Contacts Indiana About New Hire Law
Changes. ....................................................................................18
PayrollOrg Receives Favorable Response From New York
Child Support ...........................................................................18
May 3, 2024 Volume 32 Issue 5
DOL Finalizes Salary Thresholds for ‘White Collar’ Exemption
On April 23, the U.S. Department of Labor (DOL)
announced a final rule to increase the minimum salary
level for the Fair Labor Standards Act (FLSA) executive,
administrative, professional, outside sales, and computer
employee (EAP) or “white collar” exemptions [89 F.R. 32842,
4-26-24].
The final rule increases the minimum salary level in two
steps:
• On July 1, the minimum salary level increases from
$684 to $844 per week (or from $35,568 per year to $43,888
per year).
• On January 1, 2025, the minimum salary level
increases from $844 to $1,128 per week (or from $43,888
per year to $58,656 per year).
Prior to the final rule, the DOL last updated the EAP
exemption regulations in 2019. That update set the
standard salary level test at $684 per week (or $35,568 per
year) and set the highly compensated employee (HCE) total
annual compensation threshold of $107,432 per year. These
earnings thresholds have been in effect since January 1,
2020.
Levels will be updated
The final rule also requires the salary level be updated
every 3 years to match the 35th percentile of weekly
earnings of full-time salaried workers in the lowest-wage
Census Region. This means that on July 1, 2027, the salary
level will be updated.
The final rule states that updated thresholds will be
published as a notice in the Federal Register not fewer than
150 days before each update is scheduled. The final rule
includes a provision to allow the DOL to temporarily delay
a scheduled update where unforeseen economic or other
conditions warrant.
HCE salary requirements increase
The final rule increases the salary requirement for HCEs
from $107,432 to $132,964 per year on July 1, then from
$132,964 to $151,164 per year on January 1, 2025. The HCE
level also will be adjusted every 3 years.
As part of an exempt HCE’s annual compensation, the
employee must receive at least the new standard salary
amount of $884 per week on a salary or fee basis on July 1.
This threshold increases to $1,128 on January 1, 2025.
Items from the NPRM that did not change
The DOL pointed out a few items were not adopted in
the final rule, although they were in the notice of proposed
rulemaking (NPRM 88 F.R. 62152, 9-8-23 see PAYROLL
CURRENTLY, Issue 9, Vol. 31). These items from the NPRM are
not part of the final rule:
• Applying the standard salary level to the U.S.
territories subject to the federal minimum wage (Puerto
Rico, Guam, the Virgin Islands, and the Commonwealth of
the Northern Mariana Islands). The salary threshold remains
$455 per week.
• Updating the special salary levels for American
Samoa. The salary threshold remains $380 per week.
• Updating salary levels for the motion picture industry.
The special weekly base rate for the motion picture industry
remains $1,043 per week (or a proportionate amount based
DOL Finalizes Salary Thresholds for ‘White Collar’
Exemption.............................................................................................. 1
IRS Data Affirms Payroll’s Vital Role in Nation’s Tax System........ 2
DOL Publishes Report on UI Trust Fund Solvency. .........................3
USCIS Publishes Temporary Rule to Extend EADs to 5 Years....... 3
OCSS Creates Fact Sheet for Lump-Sum Reporting. .....................4
IRS Commissioner Updates the Senate Finance Committee...... 4
Payroll Solutions. ......................................................................................5
2023 EEO-1 Data Collection Due by June 4. ....................................5
Treasury Releases Fiscal Year 2025 Revenue Proposals................ 5
TIGTA Issues Report on ‘Ghost Employers’........................................ 6
2nd Circuit Rules EMTs Owed Overtime for Pre- and Post-Shift
Tasks. .......................................................................................................7
DOJ Releases 2024 COVID-19 Fraud Enforcement Report.......... 9
District Court Rules Employer Willfully Violated FLSA. ...............10
SSA Releases Tax Year 2024 W-2 Electronic Filing Specs. ...........11
IRS Dirty Dozen List Warns Taxpayers of Common Scams. ......11
IRS Encourages Employees to Check Withholding. .....................12
Nacha Amends ACH Operating Rules to Reduce Fraud.............12
7th Circuit Overturns District Court Decision in FMLA Case.....13
Update on DOJ Employment Tax Enforcement Actions............14
State and Local Highlights............................................................. 15
PayrollOrg Issues AI Report on Payroll Processing................ 17
PayrollOrg Contacts Indiana About New Hire Law
Changes. ....................................................................................18
PayrollOrg Receives Favorable Response From New York
Child Support ...........................................................................18
