The Department of Labor (DOL) issued a final rule to clarify the minimum salary level for the Fair Labor Standards Act (FLSA) executive, administrative, professional, outside sales and computer employee or “white collar” exemptions. These exemptions determine whether an employee is classified as exempt from overtime pay.
This new rule is not a sweeping policy change. Instead, it is a technical amendment designed to clean up the regulatory text after a turbulent year of litigation and regulatory reversals. Still, the update matters for employers, especially those who paused compensation planning while waiting for clarity.
Technical Amendment
In 2024, the DOL issued a rule that would have significantly increased the minimum salary thresholds for exempt employees. However, two federal district courts invalidated that rule in late 2024, concluding that the agency had exceeded its authority. The DOL needed to remove the now-invalid language from the Code of Regulations.
2019 Salary Threshold Remains in Effect
The technical amendment reinstates the salary thresholds from the DOL’s 2019 rule:
- Standard Exempt Salary Threshold: $684 per week (equivalent to $35,568 per year)
- Highly Compensated Employee (HCE) Threshold: $107,432 per year, including at least $684 per week paid on a salary or fee basis.
These thresholds apply nationwide unless a state has adopted higher standards.
Key Takeaways
For many employers this final rule provides clear direction after months of uncertainty.
Below are the key takeaways:
- No new salary increases are required with the May 15 rule.
- Existing exempt classifications remain valid if they meet the 2019 salary and duties tests.
- State‑specific rules still apply and employers should continue monitoring local requirements.
Here to Help
By partnering with a payroll company familiar with FLSA regulations and others impacting your business’s payroll operations, you can gain confidence you are taking the right steps to stay compliant and avoid fines. Contact DM Payroll Solutions today to learn how we can help.
