FLSA's New Minimum Salary Requirements: Strategic and Tactical Implementation Issues
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In 2024, the Department of Labor issued its final rule increasing the minimum salary to meet the white collar exemptions under the FLSA. The new rule calls for a series of increases to the minimum salary as follows:
- July 1, 2024: increase from $684 per week to $844 per week
- January 1, 2025: increase again to $1,128 per week
- July 1, 2027: initial triennial update
The rules are relatively simple to understand. What is more complex is the decision making on how to deal with employees who make or will make less than the minimum salary as it increases over time.
This program will discuss strategic and tactical issues to consider in implementing the new minimum salary requirements. Among the issues to be discovered:
- Determining who is or will be impacted by the new rules
- Evaluating the cost of increasing salaries to retain the exemption over different periods of time
- Evaluating the employee relations and other potential costs of reclassifying employees
- Implementing cost-controls for employees who are reclassified
- Training reclassified employees on time keeping practices for non-exempt employees as well as the people managers who work with them
In determining who is impacted, employers must remember that a number of states have minimum salary requirements that are higher than those require by the FLSA. These laws will be discussed, too.
Finally, the minimum salary must be paid in accordance with the salary basis requirement. The salary basis requirement is technical and, in some respects, counterintuitive. We will discuss how employers have inadvertently violated the salary basis requirement and steps employers can take to help avoid violating the requirement.
Learning Objectives:
- Legal requirements of new FLSA minimum salary rule.
- Strategic options in implementing the new rule.
- Tactical considerations in ensuring compliance with salary basis requirement
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Jonathan A. Segal
Jonathan is a partner at Duane Morris LLP in its Employment Group. He also is the Founder and managing principal of the Duane Morris Institute, which provides training on employment issues to HR professionals, in-house counsel and other leaders.
The core of Jonathan’s practice is helping employers maximize legal compliance and minimize legal risk with regard to harassment, discrimination, retaliation and reasonable accommodations.
Over the past few years, Jonathan has focused on religion in general and antisemitism in particular. In addition to helping clients, Jonathan has delivered a number of talks on antisemitism on behalf of the EEOC as well as to field directors of the EEOC.
Jonathan has provided training to federal judges and other members of the federal judiciary on various employment issues for more than 20 years.
Victoria Lipnic
Victoria A. Lipnic is a Partner at Resolution Economics. She leads the Company’s Human Capital Strategy Group. The Human Capital Strategy Group combines the Company’s expertise in data analytics and deep knowledge of regulatory requirements with an interdisciplinary approach to advise organizations on the full range of their human capital needs and reporting requirements including recruitment, selection, promotions, DE&I, pay equity, and ESG, especially as to equal employment opportunity and anti-discrimination issues.
Ms. Lipnic joined Resolution Economics in 2021. She has broad experience in the full range of human capital, labor and employment issues, especially from the regulatory enforcement perspective. Prior to joining the Company she served as Commissioner of the U.S. Equal Employment Opportunity Commission (“EEOC”) from 2010 to 2020 and Acting Chair from 2017 to 2019. She was appointed to the EEOC by President Barack Obama and confirmed by unanimous consent by the U.S. Senate. At the EEOC she worked on policy, cases, and regulations falling under all of the statutes enforced by the Commission including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Equal Pay Act (EPA), the Pregnancy Discrimination Act (PDA) and the Genetic Information Nondiscrimination Act (GINA). While at the EEOC she participated in numerous agency regulatory initiatives including the final GINA regulations, the ADA, as amended, regulations, and the revisions to the EEO-1 form to include pay data reporting. She organized the agency’s first public meeting on Big Data in Employment, created its Chief Data Officer position, oversaw development of the Office of Enterprise Data and Analytics and published a significant report on age discrimination. She co-chaired the EEOC’s Select Task Force on the Study of Harassment in the Workplace, and co-authored its seminal report, issued in 2016, before the #MeToo movement. Prior to the EEOC, she practiced law with Seyfarth Shaw. She also served as Assistant Secretary of Labor for Employment Standards from 2002-2008, appointed by President George W. Bush, where, among other regulatory enforcement agencies, she oversaw the Office of Federal Contract Compliance Programs and the Wage and Hour Division. In 2021-22 she chaired the Artificial Intelligence – Technical Advisory Committee for the Institute for Workplace Equality.