Under Federal Law, most employees must be paid overtime for all hours worked over 40 hours in a week. While there are many different exemptions, for most exemptions, in addition to having certain duties, the employee must be paid on a salary basis and that salary must be more than a minimum. For quite some time that minimum has been $684 per week ($35,568 per year). Recently the Department of Labor increased the minimum salary to $844 per week starting July 1, 2024, and $1,128 per week as of January 2025 and escalating thereafter.
By order entered November 15, 2024, a federal judge has ruled that the increase in minimum salary is invalid and has issued a nationwide injunction against it. If a person meets the duties requirement to fit within an exemption, the minimum salary that they must be paid returns to $684 per week ($35,568 per year).
The Department of Labor has the right to appeal this decision. As a result of the recent election, it is likely that even if an appeal is noted, the Department of Labor will abandon that appeal after the new administration takes office.
Please recall that merely paying an employee a salary of $684 per week is not sufficient to make them exempt. They also must have a primary duty that fits within a certain category to qualify them as exempt. If you have any questions, please make sure you check with an attorney because if a person is improperly classified as exempt, they are entitled to recover overtime for up to 3 years plus a 100% penalty plus attorney’s fees.
