There isn’t any change to the federal minimal salaries for exempt workers. Because it stands, the requirement is that govt, administrative, {and professional} employees should earn a minimal of $684 per week ($35,568 yearly). Nevertheless, it is very important take into account two essential issues:
- These quantities can differ by state. A number of states have already got considerably greater minimal thresholds.
- The U.S. Division of Labor (DOL) is contemplating adjustments to extend minimal wages.
When updating payroll for 2024, employers must test state-specific necessities and carefully monitor the proposed federal improve.
Many States Have Increased 2024 Exempt Wage Threshold Necessities
California
Efficient January 1, 2024, California workers should earn an annual wage of at the very least $1,280 weekly ($66,650 yearly) to fulfill the wage exemption. Sure professions even have extra minimums in California.
Laptop software program workers should be paid an hourly wage of $55.58 per hour, a month-to-month wage of $9,646, or an annual wage of $115,763.55 to be exempt from extra time.
New York
Relying on the place workers work, the exempt minimal wage for 2024 in New York can vary from $1,124.20 weekly ($58,558.40 yearly) to $1,200 weekly ($62,400 yearly). New York lawmakers additionally handed laws rising this quantity yearly by barely greater than 3% in each 2025 and 2026.
Washington
In Washington state, the wage threshold exemption is $1,302.40/week ($67,724.80 a yr) for 2024.
Colorado
The minimal wage required to qualify for the chief, administrative, or skilled exemptions below Colorado state legislation will increase to $1,057.69 per week ($54,999.98), efficient January 1, 2024.
Beneath the state’s exemption for extremely technical laptop workers, the worker could also be paid by wage (at the very least $1,057.69 per week in 2024) or by the hour. The minimal hourly charge for 2024 for these extremely technical laptop workers hasn’t been revealed but.
Proposed Adjustments to 2024 Exempt Wage Threshold
The DOL opened a Discover of Proposed Rulemaking (NPRM) in September 2023, together with will increase to minimal compensation below the Honest Labor Requirements Act (FLSA). Not solely would it not hike the exempt minimal wage in 2024 and past, however it should additionally set off an automated adjustment sooner or later.
The revised statute would set the FLSA-exempt wage for 2024 and set up wages primarily based on the thirty fifth percentile of the weekly earnings of full-time, salaried employees within the Census Area with the bottom common wages. Presently, that will set wages primarily based on the South Area. If adopted, that will improve the exemption from $684 per week ($35,568) to $1,059 per week ($55,068) per yr — a 54% improve.
Though the proposal is presently in subcommittee and never anticipated to maneuver ahead, employers should monitor it carefully to make sure compliance.
Such a rise would require a major adjustment to wage strains or reclassifying present exempt workers as non-exempt and topic to extra time guidelines. The Wage and Hour Division at DOL initiatives that this modification would affect the exempt standing of 3.6 million salaried employees.
Claiming Exempt Standing: Past FSLA Exempt Wage 2024
Wages are only one element of figuring out whether or not an worker ought to be categorized as exempt or non-exempt. Beneath the FSLA, a number of different standards should be met relying on the place:
Government Exemption
- Major responsibility is managing the enterprise or a division/subdivision
- Typically/repeatedly directs the work of two+ different full-time workers
- Authority to rent/fireplace or suggestions given specific weight
Administrative Exemption
- Major responsibility is workplace/non-manual work immediately associated to administration or enterprise operations.
- Train of discretion and unbiased judgment on issues of significance
Skilled Exemption
- Major responsibility is figure requiring superior data in a area of science/studying.
- Superior data is usually acquired by means of extended/specialised instruction.
Inventive Skilled Exemption
- Major responsibility is figure requiring invention, creativeness, originality, or expertise in a acknowledged artistic area.
Laptop Worker Exemption
- Major responsibility is laptop techniques evaluation, programming, engineering, or different extremely expert laptop work.
Exterior Gross sales Exemption
- Major responsibility is making gross sales or acquiring orders/contracts for providers/amenities
- Typically and repeatedly engaged away from employer’s administrative center
To qualify as exempt below the FSLA, workers should meet the wage thresholds and the entire necessities listed below every class.
Extremely Compensated Staff
Staff who obtain excessive complete annual compensation of $107,432 or larger (together with at the very least $684 per week wage) will also be categorized as exempt in the event that they usually and repeatedly carry out govt, administrative, or skilled duties and meet at the very least one of many standards listed.
What Ought to Employers Do?
Employers who fail to pay extra time or misclassify workers can face critical penalties. Staff can sue employers for unpaid extra time wages, liquidated damages, and lawyer’s charges below the FSLA.
Violations can even result in investigations, fines, and penalties from the Division of Labor or State Labor Departments.
When the federal government raises the boundaries for who’s eligible for extra time pay, employers have a couple of choices. They will increase salaries in order that workers are nonetheless exempt, or they will reclassify employees as non-exempt and restrict their hours. Employers might also select to decrease hourly charges to offset the elevated price of extra time pay. Moreover, employers can depend nondiscretionary bonuses as much as 10% of the usual wage stage when calculating wages.
