DOL Updates Exempt and HCE Salary Thresholds

Texas Labor and Employment Law Newsbrief

In April, we let you know that as of yesterday, the DOL was going to increase the minimum salary threshold for exempt employees from $35,568 to $43,888.  Similarly, the minimum salary threshold for highly-compensated employees (which has a relaxed duties test) was going to increase from $107,432 to $132,964. While we were hopeful these new thresholds would be enjoined, that was not the case for private employers.  (On Friday, an injunction was issued but it was limited to employees of the State of Texas.)

What does this mean for you? First, if you have any exempt employees making less than $43,888 per year, you need to increase their salary to at least that amount right away or convert them to non-exempt.  If you decide to convert them to non-exempt, you will need to pay them overtime if they work more than 40 hours per workweek.  In that event, it will be important to both monitor and track any such overtime.

There is a chance that these new thresholds will be enjoined for private employers later this year.  This will be important as the thresholds are set to increase again on January 1, 2025.  For exempt employees, the threshold will increase to $58,656. For HCE employees, the threshold will increase to $151,164.

We routinely counsel employers regarding overtime issues so let us know if you have any questions or need assistance.

Thanks, Jack, Elizabeth and Jim

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