Wage and Hour Audit: Spring Cleaning for Job Classifications

The U.S. Department of Labor has announced a Final Rule – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which amends the regulations at 29 CFR part 541 under the Fair Labor Standards Act.

The Final Rule increases the standard salary level and the total annual compensation requirement for highly compensated employees (HCE) as follows:

• On July 1, 2024, the standard salary level will equal $844 per week and HCE total annual compensation level will equal $132,964.
• On January 1, 2025, the standard salary level will equal $1,128 per week and the HCE total annual compensation level will equal $151,164.

The job duties test was not modified in the Final Rule.

What’s Next for Employers?

Companies should take this opportunity to audit their exempt classifications. In doing so, companies should undertake the following process:

• Identify all exempt classifications
• Compile and review job descriptions for accuracy
• Review salary ranges for each classification
• Gather data on overtime for each classification

If you need assistance conducting your wage and hour audit, please contact Maria F. Dwyer at mdwyer@clarkhill.com, Hannah K. Reisdorff at hreisdorff@clarkhill.com, or your Clark Hill attorney.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services.  The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.  Readers should not act upon this information without seeking professional legal counsel.  The views and opinions expressed herein represent those of the individual authors only and are not necessarily the views of Clark Hill PLC.  Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.