Federal Minimum Wage Making Strides to Catch Up – Even With New York

Fast Facts:

• Effective July 1, 2024, the Federal minimum salary for exempt employees will be increased to $844/week. The FLSA highly compensated employee threshold will be $132,964/year.

• Effective January 1, 2025, the Federal minimum salary for exempt employees will be increased to $1,128/week. The FLSA highly compensated employee threshold will be $151,164/year

• Provision to update these minimum thresholds based upon “earnings growth.” 

Last week, on April 24, 2024, the federal DOL increased the minimum salary thresholds to qualify as an exempt employee under the Fair Labor Standards Act (FLSA), from its current $684 per week to $844 per week, effective July 1, 2024. For employees qualifying under the FLSA’s highly compensated employee exemption, they must make at least $132,964 per year.

The DOL’s rule also provides for an additional increase to $1,128 per week, effective January 1, 2025. Notably, the increase in 2025 will have exempt employees across the country required to make nearly as much as those exempt employees in New York State – excluding New York City, Westchester and Long Island. New York State exempt employee’s minimum salary will be $1,161.65 per week- a difference of only $33/week – a far cry from the current difference of $440.20 per week. The 2025 increase for highly compensated employees under the FLSA will increase to $151,164 per year. The rule also provides that these minimum thresholds will now be updated every three years.

What Do I Need to Do?

Although some employers, like those in New York who already have a higher minimum threshold, may not have the need to take any action, those who are not should take action to review their exempt staff to ensure they will meet the minimum threshold to maintain exempt status.