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2024 Federal Exempt Salary Threshold Final Rule

2024 Federal Exempt Salary Threshold Final Rule

HR Alerts : Vida HR Knowledge Center
First Change: July 1, 2024
Second Change: January 1, 2025

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.


July 1, 2024

Jan 1, 2025

Exempt Employees





Overview of the Changes

$35,568 changes to $55,068. Text over US Map with Arrow.

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.

Implications for Employers and Employees

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.

California = $66,560; New York = $58,458-$62,400; Washington = $66,560

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. (SEE: 2024 STATES EXEMPT SALARY THRESHOLDS)

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.

Get day-to-day updates on 2024 Federal Exempt Salary Threshold Final Rule, visit the Vida HR Knowledge Center (Vida HR Clients Exclusive).


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