MAY 2024
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
NEW Federal Exempt Salary Threshold
Important!
By: Regina Dyerly, SHRBP, PHR
Partner / Chief Operating Officer
The DOL published the final ruling on 04/23/2024, and the first change goes into effect 7/1/2024. This timeline gives employers a narrow window to align their practices with the new standards.
Overview of the Changes
Under this new ruling, the salary threshold for exempt employees—those not entitled to overtime pay—will rise from an annual salary of $35,568 ($684 per week) to $43,888 ($844 per week), effective 7/1/2024. Then, on 1/1/2025, it will increase again to $58,656 annual salary ($1,128 per week). For "highly compensated employees" (HCEs), the threshold would increase from $107,432 to $132,964 annually, effective 7/1/2024, and again to $151,164 on 1/1/2025. Both the exempt salary threshold and the HCE threshold will be updated every three (3) years, starting 7/1/2027.
Current
$35,568
July 1, 2024
$43,888
Jan 1, 2025
$58,656
Why Does this Matter to US Employers?
This regulatory shift is projected to affect approximately 3.4 million American workers, granting them overtime eligibility. Employers will face critical decisions: they could elevate salaries to meet the new thresholds, pay overtime as needed, or reclassify employees to hourly roles. This change necessitates a proactive approach, with employers advised to review and possibly revise their payroll strategies to maintain compliance and operational efficiency.
Impact on States with Differing Exempt Salary Thresholds
Employers in states with higher salary thresholds, like California, New York, and Washington, are reminded to comply with local, state, and federal regulations, adhering to the stricter standard.
For some states, the impact of this federal update will be less pronounced. For example, the current exempt salary threshold in Colorado is already set at $55,000, a greater number than the new 2024 federal threshold ($43,888). Additionally, Colorado plans to adjust this threshold annually for inflation starting 1/1/2025 (speculated to be near $59K). Many Colorado employers may find that they are already compliant with or close to the new federal standards and only a slight adjustment is required.
The impending changes to the exempt salary thresholds are more than administrative adjustments; they are a significant shift in how businesses will manage and compensate their workforce. Staying informed and preparing for these changes is crucial for all businesses. For our Vida HR Clients, please work with your HRBP if this impacts your business.
QUESTION:
"I have an employee in Colorado who requested to take FAMLI Leave. They have told me in no uncertain terms that they will not be returning to work once their leave of absence is over. I'd rather end their employment now, rather than having to wait 12 weeks.”
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Can you fire an employee before they take FAMLI leave?
Short Answer:
An employer CANNOT take retaliatory employment action against a person because they exercised the right to request, file for, or apply for FAMLI benefits.
Detailed Answer:
This touches upon a difficult employer reality for protected leaves of absence:
An employee is not obligated to return to work. There is nothing stopping them from choosing to resign after, provided they fall under at-will employment.
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Where employers need to be careful is taking retaliatory action against an employee exercising their rights. An employer cannot take retaliatory employment action against a person because they exercised the right to request, file for, or apply for FAMLI benefits.
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As defined by Colorado FAMLI, retaliatory employment action means the denial of any right guaranteed under FAMLI, including, but not limited to, any threat, discharge, suspension, demotion, reduction of hours, or any other adverse action against an employee for the exercise of FAMLI rights.
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While the employee has communicated a desire to resign after FAMLI leave, it is still their right as an employee to request leave, and the employer has to allow them to do so.
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Keep in mind that employees are eligible to access FAMLI leave beginning on their date of hire with your business, but the FAMLI protections do not kick in until after 180 days of consecutive employment with you.
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This does not mean that you should make employment decisions prior to the 180th day of employment, instead it means that you may not need to hold the job during their absence if they haven’t been employed long enough for the protections to kick in.
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From timecard alerts to time-off requests, the app keeps you updated. Although certain notifications like payroll updates are in development, the app aims to cover a broad spectrum of HR-related alerts.
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The app supports offline punching, storing data when you're out of coverage, and syncing once you're back online. However, geolocation features require an internet connection to verify your location accurately.
EMPLOYEE HIGHLIGHT
EMPLOYEE HIGHLIGHT
EMPLOYEE HIGHLIGHT
Hello, I'm Alyssa!
Born and raised in Colorado, I have come to know the Front Range like the back of my hand. I grew up and completed my education in the Denver Metro and Douglas County areas, which afforded me ample opportunity for many invaluable life experiences!
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HR was not the first landing zone for my initial career endeavors. Working in the food service industry reinforced my respect for hard work, ability to maintain patience, and ability to navigate constantly changing systems: all of which would be necessary for my future career path.
I initially entered the world of HR working for the YMCA in 2017. Here, I navigated the ins and outs of hiring employees across the Denver Metro Area while gaining valuable skills along the way. Since joining Vida HR in 2023, not only has my position as Employee Onboarding Specialist instilled that this is the right career path for me, but I am also afforded the opportunity to grow alongside team members who share the same vision.
In the Predictive Index, I am characterized as “Guardian,” a title that summarizes my knack for skill-based work, and my ability to pay close attention to detail while being collaborative with others. People can count on me to be approachable, and diligent.
A little about me:
As people get to know me, they will learn I value my close relationships. A fun fact about me is that I am a quadruplet (3 sisters, 1 brother)! Thankfully we all stay in touch while navigating adulthood - turns out it’s not too hard when we all only have to remember one birthday!
When I’m not at work, you can likely find me enjoying paddleboarding during the summer, adventuring to places on my “must see” Colorado bucket list year-round with my partner, or building LEGO on cold winter days. I value physical and mental wellness, sharing quality time with loved ones, and spending time with my cats Cheeto and Bubberton.