Detroit City Wire

The U.S. Department of Labor's final rule, "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees," which amends the regulations at 29 CFR part 541 under the Fair Labor Standards Act, took effect this week.

The rule became effective on July 1, 2024, implementing several changes to overtime protections. These changes include increasing the standard salary level and the total annual compensation requirement for highly compensated employees (HCE). As of July 1, 2024, the standard salary level is set at $844 per week while the HCE total annual compensation level is $132,964. Further adjustments will occur on January 1, 2025, with the standard salary level rising to $1,128 per week and the HCE total annual compensation level reaching $151,164.

Additionally, a mechanism has been adopted to update earning thresholds every three years. The final rule does not alter existing duties tests. It continues to allow nondiscretionary bonuses and incentive pay, including commissions, to account for up to ten percent of the standard salary level.