The United States Department of Labor (DOL) has announced its final rule change to employee exemptions under the Fair Labor Standards Act (FLSA). The final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” raises the minimum salaries to qualify for certain FLSA overtime exemptions and provides for updates to the earning thresholds every three years based on up-to-date wage data. The final rule calls for an initial threshold increase to take effect by July 1, 2024, and then the full increase to take effect by January 1, 2025. 

PGA Career Services position: The PGA Career Services department highly recommends seeking the advice and counsel of an attorney to support your compliance efforts. It is important for employers to remember that some states have different duties and salary basis tests, and some require a daily overtime premium to be paid.

Regulation snapshot (click here to review the full regulation): The final rule changes the minimum weekly salary to qualify for one of the FLSA’s three white-collar overtime exemptions (executive, administrative, or professional) from $684 to $844 effective 7/1/2024. That minimum weekly salary then increases to $1,128 effective 1/1/2025.

In addition, the final rule changes the salary level to qualify for the highly compensated employee (HCE) exemption from $107,432/yr. to $132,964/yr. effective 7/1/2024. Then, effective 1/1/2025, the minimum annual salary increases to $151,164/yr.

This final rule does not change the existing job duties requirements of the FLSA’s three white-collar exemptions or HCE exemption. Information about the existing job duties requirements can be found by clicking here.

Since the first changes are scheduled to be effective July of this year, employers should move quickly to assess the classification status of their workers. As with previous attempts to modify overtime requirements, the final rule is likely to face legal challenges before it becomes effective.

Leaders in the golf industry should understand the potential sensitivity surrounding this topic. Examples to consider include:

• If there is a change in pay for any employees, the message for their team of employees, who are the heart of their facility, and the connection to the consumers (members and guests) should be reviewed so they do not feel like they are being demoted or of less value.
• For some employees, there could be a stigma if they have a new procedure to clock in/out.
• This may also be the time to provide an education about the budget/finances of the facility. Understanding the revenues and expenses (including payroll) required to meet the financial expectations of the stakeholders. Just because the government increases the minimum salary requirements, does not necessarily equate to decreasing the stakeholders’ financial expectations.
• Consider evaluating the impact on your budget based on the reality of hourly-based pay versus salary-based pay. Do you have a good idea of the hours worked by current salary-based staff to calculate the budget impact if pay changes to hourly-based?

Are there state laws or regulations that supersede this? The short answer is yes. For example – if the state law minimum salary amount is greater than the federal minimum salary amount. Please review your state or commonwealth’s website for their minimum salary and overtime regulations.

A question about the 10 p limit for commission included in the minimum salary amount. Is this determined on a weekly or annual basis? The 10 percent commission payment may be completed on an annual basis. Click here for the DOL’s website to answer questions on commissions.