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New DOL Rule Increases FLSA Salary Level
The Fair Labor Standards Act (FLSA) regulates minimum wage, overtime pay, and other requirements, which may affect school employees. The Department of Labor (DOL) has issued numerous rules that interpret and administer the FLSA. The DOL recently issued a rule entitled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which revises FLSA regulations effective July 1, 2024.
Most notably, this rule updates the salary threshold for employees eligible for the professional, executive, or administrative exemptions. The FLSA’s minimum salary level was $684 per week ($35,568 per year) but will now increase to $844 per week ($43,888 per year). Another planned increase takes effect on January 1, 2025, increasing the minimum salary level to $1,128 per week ($58,656 per year). The rule also creates a mechanism for salary level updates every three years to reflect earnings data. The first update is scheduled for July 1, 2027.
Despite the salary level increases, the FLSA’s professional, executive, and administrative exemptions remain intact. The new rule is expected to have a limited impact on schools, as teachers and certified instructional administrators (whose salary basis is equal to or above the rate of the school’s entrance salary for teachers) remain exempt from the FLSA. Accordingly, the new rule will likely affect a limited category of school employees, such as directors, supervisors, and other noninstructional employees who currently qualify for an FLSA exemption.
Schools will need to confirm whether current salaries for those employees are at or above the updated FLSA salary threshold. If not, the only way for such employees to qualify for an exemption is to increase exempt employee salaries to satisfy the new threshold. Employees who lose their exempt status are entitled to overtime compensation.
Please direct questions about the DOL’s new FLSA rule and its potential impact on your school’s staff to a Thrun labor attorney.