Individuals paid a salary who perform executive, administrative, professional or outside sales
duties and certain computer employees are exempt from the rules for overtime pay if they meet
certain conditions. One those conditions is an annual salary above a level set by the
Department of Labor.
Beginning July 1, 2024, in order to be exempt from the payment of overtime, the minimum
salary must be at least $844 per week ($43,888 per year). Beginning January 1, 2025 the
weekly minimum salary increases to $1,128 ($58,656).
Employers have a range of options for responding to the updated thresholds established in this
rule. For each employee who is affected by the increased earnings threshold, an employer may:
*increase the salary of the employee to at least the new salary level to retain their exempt
status;
*pay an overtime premium of one and a half times the employee’s regular rate of pay for any
overtime hours worked;
*reduce or eliminate overtime hours;
* reduce the amount of pay allocated to the employee’s base salary (provided that the
employee still earns at least the applicable hourly minimum wage) to offset new overtime
pay; or
* use some combination of these responses.
Further information and guidance about this change can be found at
https://www.dol.gov/agencies/whd/overtime/rulemaking
LEGAL DISCLAIMER: The information presented on this blog should not be construed as legal, tax, accounting or any other professional advice or service. You should consult with a professional advisor familiar with your particular factual situation for advice concerning specific tax or other matters before making any decision.
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