DOL Salary Rule in Effect for Private Employers

As of July 1, 2024, private employers must comply with the new Department of Labor (DOL) salary thresholds for exempt employees. This marks the first increase in the minimum salary requirements for exempt executive, administrative, professional (EAP), and highly compensated employees (HCE) in several years. Understanding these changes is crucial for ensuring compliance and avoiding potential legal issues.

New Minimum Salary Thresholds


Under the updated rule, the salary requirements for exempt EAP employees have increased significantly. These employees must now be paid at least $844 per week, which equates to $43,888 per year. For employees exempt under the HCE exemption, the requirements are even higher. HCEs must earn at least $844 per week on a salary basis and at least $132,964 per year in total compensation.

Compliance Requirements


Employers must review and, if necessary, adjust the salaries of their exempt employees to meet these new thresholds. Failing to comply can result in penalties and back pay liabilities. Here are some steps employers should take:

  1. Audit Current Salaries: Conduct a thorough review of current employee salaries to identify those who fall below the new thresholds.
  2. Adjust Salaries as Needed: Increase the salaries of affected employees to at least $844 per week to maintain their exempt status.
  3. Review Job Descriptions: Ensure that job descriptions accurately reflect the duties and responsibilities of exempt employees, as misclassification can lead to compliance issues.
  4. Update Payroll Systems: Make necessary adjustments to payroll systems to accommodate the new salary thresholds and ensure accurate and timely payment.

Implications for Employers


These changes highlight the importance of staying informed about regulatory updates and their impact on your business. Non-compliance can lead to significant financial and legal repercussions. By proactively adjusting salaries and ensuring your payroll systems are up-to-date, you can avoid potential pitfalls and maintain compliance with federal regulations.

Conclusion


The new DOL salary thresholds for exempt employees are now in effect, and private employers must take immediate action to ensure compliance. By auditing current salaries, making necessary adjustments, and staying informed about regulatory changes, employers can navigate these updates smoothly. If you have any questions or need assistance with compliance, consider consulting with a human resources professional or legal advisor.

Stay proactive and ensure your business remains compliant with these important federal regulations.

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