{"id":7579,"date":"2024-05-31T15:41:35","date_gmt":"2024-05-31T15:41:35","guid":{"rendered":"https:\/\/help.insperity.com\/hcm\/?post_type=ht_kb&p=7579"},"modified":"2024-06-21T13:55:47","modified_gmt":"2024-06-21T13:55:47","slug":"white-collar-exemption-faqs","status":"publish","type":"ht_kb","link":"https:\/\/help.insperity.com\/hcm\/knowledge-base\/white-collar-exemption-faqs\/","title":{"rendered":"White Collar Exemption FAQs"},"content":{"rendered":"\n

Updated June 21, 2024<\/em><\/p>\n\n\n\n

<\/p>\n\n\n

The \u201cWhite Collar Exemption\u201d is a designation within the Fair Labor Standards Act (FLSA) that authorizes the exemption of select employees from the federally mandated minimum wage and overtime pay provisions. Eligibility for this exemption is contingent upon meeting predefined criteria concerning an employee\u2019s professional duties and compensation framework. Detailed information and responses to frequently asked questions about the White Collar Exemption are available below for review.<\/p>\n

<\/a>When will the new rule become effective?<\/span><\/h4>\n

The Department of Labor (DOL) Final Rule<\/a> was published in the Federal Register on April 26, 2024, and will be effective in two stages on July 1, 2024, and January 1, 2025.<\/p>\n

<\/a><\/a>What are the changes to the standard overtime salary threshold for white-collar exemptions?<\/span><\/h4>\n

The final rule introduces increases to the standard salary level and the highly compensated employee total annual compensation threshold, with future updates every three years. In simple terms, employees earning less than the standard salary on the respective dates must be paid overtime for hours worked over 40 in a workweek. The table below shows these planned increases.<\/p>\n\n\n\n\n\n\n\n
\n

Date<\/strong><\/p>\n<\/td>\n

\n

Standard Salary Level<\/strong><\/p>\n<\/td>\n

\n

Highly Compensated Employee Total Annual Compensated Threshold<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Before July 1, 2024<\/span><\/p>\n<\/td>\n

\n

$684 per week (or $35,568 per year)<\/span><\/p>\n<\/td>\n

\n

$107,432 per year, including at least $684 per week paid on a salary or fee basis.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

July 1, 2024<\/span><\/p>\n<\/td>\n

\n

$844 per week (or $43,888 per year)<\/span><\/p>\n<\/td>\n

\n

$132,964 per year, including at least $844 per week paid on a salary or fee basis<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

January 1, 2025<\/span><\/p>\n<\/td>\n

\n

$1,128 per week (or $58,656 per year)<\/span><\/p>\n<\/td>\n

\n

$151,164 per year, including at least $1,128 per week paid on a salary or fee basis<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

July 1, 2027 and every 3 years afterwards<\/span><\/p>\n<\/td>\n

\n

To be determined by applying the methodology used to set the salary level in effect at the time of the update.<\/span><\/p>\n<\/td>\n

\n

To be determined by applying the methodology used to set the salary level in effect at the time of the update.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/h4>\n

Restoring and Extending Overtime Protections<\/span><\/h4>\n

\"Restoring<\/p>\n

What changes have been made to the salary threshold for highly compensated employees (HCE)?<\/span><\/h4>\n

The salary threshold for highly compensated employees has been raised from $107,432 per year to $132,964 on July 1, 2024, and $151,164 on January 1, 2025. Employees earning above this amount may qualify for an exemption from overtime pay if they meet certain criteria, including performing office or non-manual work and regularly performing at least one of the duties of an exempt executive, administrative, or professional employee.<\/p>\n

<\/a>What are the criteria for the white-collar exemptions?<\/span><\/h4>\n

To qualify for a white-collar exemption (executive, administrative, professional, HCE) employees must meet the following criteria:<\/p>\n