The U.S. Department of Labor (DOL) agreed to dismiss its appeal of a 2024 district court decision blocking an overtime rule that would have raised the minimum salary requirement for determining whether white-collar employees were exempt from overtime to $58,656 annually. As a result, the salary threshold for white-collar exemptions remains back at the 2019 overtime level of $35,568 annually ($684 per week).
A Nov. 15, 2024, federal court decision blocked the overtime rule that had been issued during the Biden administration.
Subsequently, in December 2024, another district court also vacated and set aside the rule, but the government appealed that ruling and held the appeal in abeyance while the DOL re-examined the rule.
“This rule would have changed the status of millions of American workers with flexible schedules and decision-making status to that of hourly employees, and in some cases it would have eliminated their jobs,” said John Vecchione, senior litigation counsel of the New Civil Liberties Alliance (NCLA), which challenged the rule.
The DOL’s rule would have allowed it to automatically raise the minimum salary level to be exempt every three years, violating the Administrative Procedure Act’s notice-and-comment requirements and the Fair Labor Standards Act (FLSA), which authorizes exemptions only “from time to time by regulation,” according to the NCLA.
Duties Tests
Exempt employees must pass both salary and duties tests.
Earning a certain salary is only one of three requirements that must be met for an employee to be exempt from overtime under the white-collar exemptions. These three requirements are the two prongs of the salary test — the salary basis test and salary level test — plus the duties test:
To be exempt, the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the FLSA regulations.
For the executive exemption, employees must have a primary duty of managing the enterprise or a department or subdivision of the enterprise; must customarily and regularly direct the work of at least two employees; and must have the authority to hire or fire, or their suggestions and recommendations as to the hiring, firing, or changing the status of other employees must be given particular weight.
For the administrative exemption, employees must have a primary duty of performing office or nonmanual work directly related to the management or general business operations of the employer or the employer’s customers, and their primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.
For a professional exemption, employees must have a primary duty of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by prolonged, specialized, intellectual instruction and study, or must specialize in a few other similarly, highly specialized fields, such as teaching, computer analytics, and engineering.
Only about a third of organizations said they face challenges when determining overtime-exempt status based on the salary basis test (34%) and the salary threshold test (31%), but more than half of organizations face challenges when determining overtime-exempt status based on the duties test (58%), according to The Case for FLSA Modernization Executive Summary (SHRM, 2026). The most common challenge faced with the duties test is difficulty determining overtime-exempt status when the employee regularly engages in a mix of both exempt and nonexempt duties and responsibilities (58%).
States May Have More Stringent Standards
States may have stricter duties and salary tests.
In California, an exempt employee must spend more than one-half of their time engaged in exempt work.
In addition, some states, such as California, have salary thresholds higher than the FLSA’s. In California, the salary threshold for the executive, administrative, and professional exemptions is double the state minimum wage. This year in the state, the minimum salary requirement for exempt employees is $70,304 annually.
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المحتويات ذات الصلة
تعرّف على كيفية نجاح شركة مارش ماكلينان في تعزيز رفاهية الموظفين باستخدام الأدوات الرقمية، وتحسين الإنتاجية والرضا عن العمل لأكثر من 20,000 موظف.
ويتوقع بعض الخبراء أن يساعد انتشار الذكاء الاصطناعي في مكان العمل، والزيادة المتوقعة في الإنتاجية والكفاءة المترتبة على ذلك، في بدء أسبوع العمل الذي يستمر أربعة أيام.
مع استمرار تطور تكنولوجيا الذكاء الاصطناعي، سيزداد الطلب على العمال الذين لديهم القدرة على العمل جنباً إلى جنب مع أنظمة الذكاء الاصطناعي وإدارتها. وهذا يعني أن العمال غير القادرين على التأقلم وتعلم هذه المهارات الجديدة سوف يتخلفون عن الركب في سوق العمل.