On July 1, 2024, the Fair Labor Standards Act (FLSA)’s salary thresholds for the “EAP” (or “white collar”) exemption for executive, administrative, and professional employees, as well as the Highly Compensated Employee (HCE) exemption will change. Employers should review the exemption status of their employees to ensure exempt employees meet the new thresholds.

EAP Exemption 

The EAP exemption allows certain employees to be exempt from overtime pay requirements. To qualify for this exemption, an employee must meet the following criteria:

1. 1. Salary Payment: The employee must be paid a salary, rather than an hourly wage.
   2. Minimum Salary Threshold: The salary paid to the employee must meet or exceed a minimum threshold amount.
   3. Job Duties: The employee’s primary duties must fall within the categories of executive, administrative, or professional work.

HCE Exemption

The HCE exemption applies to employees who earn a high level of compensation. These employees may be exempt from certain FLSA requirements based on their total annual compensation.

Changes to the Salary Threshold for the EAP and HCE Exemptions

• Before July 1, 2024:
  • Standard Salary Level: $684 per week (equivalent to $35,568 per year)
  • Highly Compensated Employee Total Annual Compensation Threshold: $107,432 per year, including at least $684 per week paid on a salary or fee basis.
• July 1, 2024:
  • Standard Salary Level: $844 per week (equivalent to $43,888 per year)
  • Highly Compensated Employee Total Annual Compensation Threshold: $132,964 per year, including at least $844 per week paid on a salary or fee basis.
• January 1, 2025:
  • Standard Salary Level: $1,128 per week (equivalent to $58,656 per year)
  • Highly Compensated Employee Total Annual Compensation Threshold: $151,164 per year, including at least $1,128 per week paid on a salary or fee basis.

The salary threshold is also expected to automatically update every three years beginning on July 1, 2027.

If you have questions regarding the FLSA, contact Thomas Mamer LLP’s Labor & Employment attorneys for further guidance.