© 2024 American Payroll Institute, Inc.
June 7, 2024 Volume 32 Issue 6
Employers Should Check Salary Thresholds Before July 1
Employers should check before July 1 to ensure they are
in compliance with the minimum salary levels required
for their exempt employees. On July 1, the minimum salary
level for exempt employees increases from $684 to $844
per week (or from $35,568 per year to $43,888 per year) as
changes made to the Fair Labor Standards Act executive,
administrative, professional, outside sales, and computer
employee (EAP) or “white collar” exemptions go into effect.
On April 23, the U.S. Department of Labor (DOL)
announced a final rule to increase the salary thresholds in two
steps (89 F.R. 32842, 4-26-24 see PAYROLL CURRENTLY, Issue 5,
Vol. 32). The first increase takes place on July 1, and the second
increase is on January 1, 2025, when the minimum salary level
increases from $844 to $1,128 per week (or from $43,888 per
year to $58,656 per year).
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.
Don’t forget HCEs
The final rule also increases the salary requirement for
highly compensated employees (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.
As part of an exempt HCE’s annual compensation, the
employee must receive at least the new standard salary
amount of $844 per week on a salary or fee basis on July 1. This
threshold increases to $1,128 on January 1, 2025.
Lawsuits filed in Texas
Three lawsuits have been filed in Texas to stop the final
rule.
On May 22, business groups filed a lawsuit against the
DOL to block the final rule (Plano Chamber of Commerce v. U.S.
DOL, No. 4:24-cv-468 (E.D. Texas, 5-22-24)). This lawsuit contains
some of the same plaintiffs as the 2016 lawsuit that challenged
the DOL’s prior attempt to raise the salary thresholds.
The Texas Attorney General also initiated a lawsuit against
the DOL – Texas v. U.S. DOL, No. 4:24-cv-499 (E.D. Texas). A third
case – Flint Avenue v. U.S. DOL, No. 5:24-cv-130 (N.D. Texas) –
was brought by a marketing firm against the DOL.
The district courts have not ruled on any of the cases.
More information
The latest information on the white collar exemptions and
other payroll topics is available on the PayrollOrg website in
the Hot Topics section under the Compliance tab. The DOL also
created FAQs about the final rule.
Employers Should Check Salary Thresholds Before July 1.......... 1
Social Security Trustees Project $174,900 Wage Base for 2025.... 2
IRS Announces HSA Limits for 2025.................................................... 2
Governments Offer Guidance on AI in the Workplace. ................2
IRS Revises Form 941-X, Instructions. .................................................3
Biden Vetoes Resolution to Block NLRB Rule.................................... 4
EEOC Files Lawsuits Against Employers for Noncompliance. ....4
Acting Secretary Discusses DOL Rules With House Committee. ..5
PayrollOrg Offers Payroll Mid-Year Compliance Update
Course. ....................................................................................................5
SSA to Hold Semi-Annual Meeting on June 13............................... 5
E-Verify Users Should Check Log-in Bookmark............................... 6
IRS Issues Corrected Publication 15-B. ...............................................6
SECURE 2.0 Act Changes May Affect Form W-2 Reporting. ........6
IRS Issues FAQs About SECURE 2.0 Disaster Relief.......................... 7
IRS Provides Tips on Disasters, Emergency Planning.................... 8
IRS Announces Quarterly Interest Rates............................................ 9
Virtual Congress to Offer Education, Networking.......................... 9
SEC Shortens Settlement Cycle for Most Broker-Dealer
Transactions.......................................................................................... 9
IRS Commissioner Testifies Before House Subcommittee. ........10
IRS to Add More Forms to IRIS.............................................................10
Court Affirms DOL’s Ability to Sue Employers Under FLSA.........11
Appeals Court Upholds Minimum Wage for Recreation
Workers.................................................................................................11
Businesses Can Protect Themselves From Tax Scams.................12
IRS Creates Webpage on Correcting Employment Taxes...........13
Special Report: A Conversation With IRS, SSA – Part 1. ..............13
State and Local Highlights............................................................. 16
PayrollOrg Asks for Flexibility in Maryland Pay Statement
Changes. ....................................................................................18
PayrollOrg Offers Comments on AI to U.S. House Task
Force............................................................................................ 18
PCC Addresses Certification and Antitrust Issues .................19
Due to observance of Independence Day on July 4, the next issue of Payroll Currently will be on July 12.
June 7, 2024 Volume 32 Issue 6
Employers Should Check Salary Thresholds Before July 1
Employers should check before July 1 to ensure they are
in compliance with the minimum salary levels required
for their exempt employees. On July 1, the minimum salary
level for exempt employees increases from $684 to $844
per week (or from $35,568 per year to $43,888 per year) as
changes made to the Fair Labor Standards Act executive,
administrative, professional, outside sales, and computer
employee (EAP) or “white collar” exemptions go into effect.
On April 23, the U.S. Department of Labor (DOL)
announced a final rule to increase the salary thresholds in two
steps (89 F.R. 32842, 4-26-24 see PAYROLL CURRENTLY, Issue 5,
Vol. 32). The first increase takes place on July 1, and the second
increase is on January 1, 2025, when the minimum salary level
increases from $844 to $1,128 per week (or from $43,888 per
year to $58,656 per year).
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.
Don’t forget HCEs
The final rule also increases the salary requirement for
highly compensated employees (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.
As part of an exempt HCE’s annual compensation, the
employee must receive at least the new standard salary
amount of $844 per week on a salary or fee basis on July 1. This
threshold increases to $1,128 on January 1, 2025.
Lawsuits filed in Texas
Three lawsuits have been filed in Texas to stop the final
rule.
On May 22, business groups filed a lawsuit against the
DOL to block the final rule (Plano Chamber of Commerce v. U.S.
DOL, No. 4:24-cv-468 (E.D. Texas, 5-22-24)). This lawsuit contains
some of the same plaintiffs as the 2016 lawsuit that challenged
the DOL’s prior attempt to raise the salary thresholds.
The Texas Attorney General also initiated a lawsuit against
the DOL – Texas v. U.S. DOL, No. 4:24-cv-499 (E.D. Texas). A third
case – Flint Avenue v. U.S. DOL, No. 5:24-cv-130 (N.D. Texas) –
was brought by a marketing firm against the DOL.
The district courts have not ruled on any of the cases.
More information
The latest information on the white collar exemptions and
other payroll topics is available on the PayrollOrg website in
the Hot Topics section under the Compliance tab. The DOL also
created FAQs about the final rule.
Employers Should Check Salary Thresholds Before July 1.......... 1
Social Security Trustees Project $174,900 Wage Base for 2025.... 2
IRS Announces HSA Limits for 2025.................................................... 2
Governments Offer Guidance on AI in the Workplace. ................2
IRS Revises Form 941-X, Instructions. .................................................3
Biden Vetoes Resolution to Block NLRB Rule.................................... 4
EEOC Files Lawsuits Against Employers for Noncompliance. ....4
Acting Secretary Discusses DOL Rules With House Committee. ..5
PayrollOrg Offers Payroll Mid-Year Compliance Update
Course. ....................................................................................................5
SSA to Hold Semi-Annual Meeting on June 13............................... 5
E-Verify Users Should Check Log-in Bookmark............................... 6
IRS Issues Corrected Publication 15-B. ...............................................6
SECURE 2.0 Act Changes May Affect Form W-2 Reporting. ........6
IRS Issues FAQs About SECURE 2.0 Disaster Relief.......................... 7
IRS Provides Tips on Disasters, Emergency Planning.................... 8
IRS Announces Quarterly Interest Rates............................................ 9
Virtual Congress to Offer Education, Networking.......................... 9
SEC Shortens Settlement Cycle for Most Broker-Dealer
Transactions.......................................................................................... 9
IRS Commissioner Testifies Before House Subcommittee. ........10
IRS to Add More Forms to IRIS.............................................................10
Court Affirms DOL’s Ability to Sue Employers Under FLSA.........11
Appeals Court Upholds Minimum Wage for Recreation
Workers.................................................................................................11
Businesses Can Protect Themselves From Tax Scams.................12
IRS Creates Webpage on Correcting Employment Taxes...........13
Special Report: A Conversation With IRS, SSA – Part 1. ..............13
State and Local Highlights............................................................. 16
PayrollOrg Asks for Flexibility in Maryland Pay Statement
Changes. ....................................................................................18
PayrollOrg Offers Comments on AI to U.S. House Task
Force............................................................................................ 18
PCC Addresses Certification and Antitrust Issues .................19
Due to observance of Independence Day on July 4, the next issue of Payroll Currently will be on July 12.
