The U.S. Department of Labor (DOL) announced a final rule to increase the minimum salary level for the Fair Labor Standards Act (FLSA) “white collar” exemptions in two steps. On July 1, the minimum salary level increases from $684 to $844 per week (or from $35,568 per year to $43,888 per year). On January 1, 2025, the minimum salary level increases from $844 to $1,128 per week (or from $43,888 per year to $58,656 per year).
The new salary thresholds for white collar exemptions will impact the states. There are 17 states with no general overtime pay provisions. Employers covered by the FLSA (through either employer or individual employee coverage) in these states must follow the federal overtime pay requirements, including the new salary thresholds. This category includes: Alabama, Arizona, Delaware, Florida, Georgia, Idaho, Louisiana, Mississippi, Nebraska, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.
There are 14 states and territories that either rely on or directly refer to the overtime definitions found in the FLSA (i.e., they must also follow the new salary thresholds): Arkansas, District of Columbia, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Hampshire, North Carolina, Ohio, and Rhode Island.
In addition to the categories above, there are 20 states that have their own overtime rules to consider in addition to the federal rules. States in this category include: Alaska, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Minnesota, Montana, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Vermont, Washington, West Virginia, and Wisconsin.
Where state law requirements are less favorable to an employee than the requirements in the FLSA, the state laws apply only to employees who are not covered by the FLSA. Where the state requirements are more favorable to an employee than the FLSA, they apply to all employees covered by the state law, even if they are also covered by the FLSA.
Interested in more state and local payroll coverage? PayrollOrg’s PayState Update eNewsletter is perfect for you.
Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for PayrollOrg.