CHANGES TO FAIR LABOR STANDARDS ACT (FLSA)

An update to our Announcement on June 5th, 2024

Exempt Worker Salary Thresholds:

In June, we announced updates to the Department of Labor’s (DOL) new rule increasing the minimum salary requirements for exempt employees under the FLSA. These changes aimed to extend overtime protections to more lower-paid salaried workers.

  • White-Collar Exemption (such as administrators, managers, and teachers):
    • July 1, 2024: Minimum salary increased to $844 per week ($43,888 annually).
    • January 1, 2025: Minimum salary was set to increase to $1,128 per week ($58,656 annually).
  • Highly Compensated Employee Exemption:
    • July 1, 2024: Minimum salary increased to $132,964 per year, including at least $844 per week paid on a salary or fee basis.
    • January 1, 2025: Minimum salary was set to increase to $151,164 per year, including at least $1,128 per week paid on a salary or fee basis.

WHAT HAS CHANGED?
New Ruling on November 15th, 2024

On November 15, 2024 a federal judge in Texas ruled that the DOL exceeded its authority in issuing the 2024 rule. This decision will:

  • Roll back the July 1, 2024 increase
  • Block the January 1, 2025 increase
  • Reset the white-collar salary threshold to $35,568 (the prior standard)
  • Reset the highly compensated salary threshold to $107,432 (the prior standard)

Although the DOL could appeal, the recent election results and anticipated administrative changes may prevent them from taking such action. For now, employers can return to the previous FLSA salary threshold when determining exempt classifications.

State Law Reminder
This federal decision does not affect state laws with higher salary thresholds for exempt employees, such as those in California or Colorado, which have stricter overtime protections. Employers operating in these states must continue to comply with state-specific standards.

CORPORATE TRANSPARENCY ACT REPORTING

Deadline is Approaching

Deadline for filing initial Beneficial Ownership Information:

The deadline for filing initial Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA) is quickly approaching. Entities exempt under Section 501(c) of the Internal Revenue Code and their wholly-owned subsidiaries are exempt from reporting. Cooperatives and small businesses are not exempt.

For our cooperative and small business clients, please be aware of the following deadlines:

· If your entity formed before 2024, you must file before January 1, 2025
· If your entity formed in 2024, you must report within 90 days of formation

BOI reporting is a straightforward process and can be completed online. To assist with compliance, FinCEN offers a Small Entity Compliance Guide and a collection of FAQs to help businesses navigate these new requirements, available here. While Scholz Nonprofit Law does not file BOI reports on behalf of clients, we are available to help you determine your filing obligations and provide guidance as needed.

If you have any questions,

Scholz Nonprofit Law is here for you. Please let us know how we can help by emailing Jessica, Melissa, Jeff, West or Tracy.