• Skip to content
  • Skip to primary sidebar
Bell Nunnally & Martin LLP

News/Events

Alerts | May 7, 2024

New DOL Overtime Rule Significantly Raises Salary Thresholds

In a new development that will impact the wage and hour policies for many employers, the U.S. Department of Labor (DOL) raised the minimum salary threshold necessary to consider an employee exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) on April 23, 2024. The rule applies to the “white collar” and “highly compensated employee” (HCE) exemptions.

White Collar Exemption Threshold Raised 65%

This exemption applies to employees employed in a bona fide executive, administrative or professional capacity who: (1) receive a salary that is equal to or greater than the threshold set by the DOL and is not based on hours worked or quality of work performed; and (2) primarily perform executive, administrative or professional duties as defined by the DOL. The current salary threshold is $684 per week ($35,568.00 annually). Under the new rule, the threshold increases to $844 a week ($43,888.00 annually) as of July 1, 2024. Then the threshold increases to $1,128.00 per week ($58,656.00 annually) on Jan. 1, 2025. The threshold will be updated every three years starting July 1, 2027.

HCE Exemption Salary Threshold Raised 40%

The HCE exemption applies to employees who are: (1) paid a total annual compensation in excess of a salary threshold set by the DOL (currently $107,432), including at least the minimum weekly basis of the white-collar exemption; (2) primarily perform office or nonmanual work; and (3) customarily and regularly perform at least one of the duties or responsibilities of the white-collar exemption. Effective July 1, 2024 the HCE salary threshold will increase to $132,964.00 a year and then go to $151,164.00 a year on Jan. 1, 2025. It too will be updated every three years starting July 1, 2027.

Job Duties Tests Remain the Same

Besides having a salary minimum threshold, the white collar and HCE exceptions contain job duties components that also must be met for the exemption from overtime pay to apply, and those components remain unchanged.

Takeaway For Employers

If this rule survives expected legal challenges, it will expand the population of HCE and white collar workers who will now be entitled to receive overtime compensation.

In all likelihood the new rule will be challenged in a court proceeding in which an injunction against enforcement of the rule will be sought. In 2016 a similar rule passed by the Obama administration was enjoined from enforcement nationwide by a Texas federal district court which held that the DOL exceeded its delegated statutory authority under the FLSA by raising the minimum salary level such that it supplanted the duties test under the FLSA; but an appellate court never ruled on the district court’s decision because the Trump administration changed the rule. Additionally, the current U.S. Supreme Court has been critical of administrative agency rule making, especially overbroad, sweeping regulations. Given the odds are that the new rule will be challenged and possibly enjoined from going into effect, employers probably should not take immediate steps to comply with the new rule because once changes are made it could be awkward, if not difficult, to rescind them in the event that the new rule is enjoined.

However, since employers cannot rely upon the new rule being enjoined, they need to make a thorough analysis of each employee they currently classify as exempt but whose current salary does not reach the new minimum thresholds to determine whether it makes economic and business sense to increase the employee’s pay to reach those thresholds or to reclassify the employee as non-exempt. Once the decisions are made, employers need to take the steps to assure that they can implement them by July 1 to make sure those employees it wants to remain exempt do not lose their exemptions and to comply with the overtime and record keeping requirements for the employees who they decide to reclassify as non-exempt.

In the meantime, we will keep you advised as to all developments with respect to this rule, including on any legal challenge to it.

Primary Sidebar

Related Attorneys

  • Jay M. Wallace

    Jay M. Wallace

    Partner

    jwallace@bellnunnally.com
    214-740-1407
  • Thomas L. Case

    Thomas L. Case

    Of Counsel

    tcase@bellnunnally.com
    214-740-1422

Related Practices

  • Labor and Employment
Stay in the know...
Don’t miss anything — Subscribe to our email list!
2323 Ross Avenue, Suite 1900, Dallas, Texas 75201 | 214.740.1400
© 2025 Bell Nunnally & Martin LLP All Rights Reserved
  • Sitemap
  • Disclaimer
  • Privacy Policy
  • Client Pay
legalink logo Site by
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
  • People
  • Practices
  • Industries
  • News/Events
  • Contact Us
  • About Us
  • Clients
  • Careers
  • Client Pay