Richard McGee                                                                                                                                                                                                                                                                                                                            612-812-9673

On April 23, 2024 the federal Department of Labor announced a final rule that increases the pay required to properly classify workers as exempt from the overtime pay requirements under the Fair Labor Standards Act (FLSA).  Remember, the FLSA is silent on its applicability to tribal employers and therefore there is an argument it applies and an argument it does not apply.  If tribal employers comply with the law, or meet the standards of the law, the weekly minimum pay for most exempt employees will increase this summer.  Presently, exempt employees must be paid $684 each week (or more) to meet the pay requirement under the FLSA.  When annualized, $684 a week totals $35,568.  As of July 1, 2024 minimum pay will be $844 each week and that is annualized to $43,888.  Six months later, on January 1, 2025 minimum pay increases to $1,128 each week and that is annualized to $58,656.

To properly classify a worker as an exempt employee, minimum pay is one of the three requirements.  In addition to minimum pay, exempt employees must be paid on a salary basis and perform exempt duties.  Those two requirements, and all the details included by them, are not changing with the rule change just announced.

Between now and July there likely will be a court challenge to the final rule and that may impact the deadlines discussed above.  In the meantime, check your list of exempt employees that earn less than $844 each week because July 1 is a couple months away and maintaining compliance with these standards reduces employer risk.

May I assist you and your team with drafting policy, evaluating handbooks, training, assisting with hiring, firing and discipline; performing investigations of employee misconduct and representing the tribal employer if claims are presented?