State-Specific Salary Requirements for Exempt Employees May Differ from Federal Requirements

Recent increases in the minimum salary thresholds for exempt employees under the Fair Labor Standards Act (FLSA) require employers to reassess their employees' exemption statuses. Effective July 1, 2024, the Department of Labor raised the minimum salary for executive, administrative, and professional exemptions to $844 per week (approximately $43,888 per year), with another increase set for January 1, 2025, raising the threshold to $1,128 per week (approximately $58,656 per year), and automatic updates starting July 1, 2027. However, employers must also consider state-specific laws, which might set higher salary thresholds for exemption eligibility than the new federal standards.

State regulations vary, with some states enforcing salary requirements that exceed the July 1, 2024, federal threshold. While some states align with FLSA and DOL regulations, others have their own minimum wage and overtime laws that could be more stringent. Employers must carefully navigate these state-specific requirements to ensure compliance, as meeting only the federal threshold might not suffice in states with higher standards.

Click here for additional information from HCAOA Associate Member Littler.