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In addition, starting on July 1, 2027, the salary threshold will automatically increase every three years.
The rule also increases the Highly Compensated Employees' exemption salary basis from $107,432.00 to $132,964.00 on July 1, 2024, and then up to $151,164.00 effective January 1, 2025. Neither Oregon nor Washington recognize the Highly Compensated Employee exemption. Further, Washington has its own salary basis which is higher than the FLSA increased salary basis: $67,724.80 annual ($1,302.40 per week) which Washington employers must pay for exempt employees.
Takeaway
Employers will need to identify which qualifying employees have salaries that are between the current and the new thresholds for FLSA or Washington law. Employers will need to determine whether to consider these employees as no longer exempt due to the increased thresholds, and apply the required timekeeping and pay policies, or to increase the salary to protect the exempt status. This is also a prudent opportunity to review and ensure that the employees are performing duties which qualify for the FLSA white collar duties tests.
The employment lawyers at Farleigh Wada Witt are available to assist you with all of your questions and needs related to the increases in salary basis for exempt employees.
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