Tag Archives: Wages

Overtime Exemption Thresholds for Salaried Workers Set to Change in 2025

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The U.S. Department of Labor’s final rule on overtime exemptions, announced on April 23, 2024, is set to bring significant changes to the salary thresholds for exempt employees starting July 1, 2024, with further increases planned for 2025. This rule aims to extend overtime protections to millions of workers and update the regulations under the Fair Labor Standards Act (FLSA).

Key Changes

On July 1, 2024, the minimum salary threshold for executive, administrative, and professional employees to be classified as exempt from overtime rose to $844 per week or $43,888 annually. This marks a substantial increase from the previous threshold of $684 per week or $35,568 annually. As currently planned, an even more significant change is scheduled for January 1, 2025, when the salary threshold will further increase to $1,128 per week or $58,656 annually. Similarly, the highly compensated employee exemption increased to $132,964 on July 1, 2024, and is set to increase again to $151,164 on January 1, 2025.

Impact and Considerations

Assuming they take effect as scheduled, employers must carefully evaluate their workforce to identify roles that may be affected by the new thresholds. Some key considerations include:

  1. Reclassification: Employers may need to reclassify some exempt employees as non-exempt if their salaries fall below the new thresholds.
  2. Salary Adjustments: For employees near the threshold, companies might consider raising salaries to maintain exempt status.
  3. Compliance Costs: Businesses should anticipate increased labor costs, either through higher salaries or potential overtime payments.
  4. State Laws: Employers must also be aware of state-specific overtime laws, which may have higher thresholds or different requirements

Like all Agency regulations, final implementation may be challenged or delayed by court challenges or politics. As we near the implementation of the 2025 date, Employers should monitor U.S. Department of Labor updates to track the status of this pending change.

Virginia Minimum Wage Law: Status Update March 2024

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Virginia Governor Glenn Youngkin has vetoed Virginia’s latest proposed minimum wage increase. The subject bill, which had passed the House of Delegates with a 51-49 party-line vote, aimed to raise the current minimum wage of $12 per hour to $13.50 by January 2025 and then to $15 by January 2026. The preceding wage law from 2020 incrementally raised the minimum wage from $9.50 to $12.00 per hour as of January 1, 2023.


Governor Youngkin’s veto of the bill will continue to stir debate across the state. Youngkin argues that the non-market increases in wages would raise costs on small businesses, without regard to economic differences in the varying regions across the state. Advocates for the wage increase argue that it would help working families afford basic necessities and keep up with inflation. Additional debate continues as to whether government mandated wage increases, as opposed to free-market increases, contribute to rises in inflation.


While additional wage increases between 2023 and 2026 required legislative action, Va. Code Section 40.1-28.10 still includes a unique wage adjustment scheme. Beginning October 1, 2026, and every year thereafter, the state must determine the adjusted state hourly minimum wage for the following January 1. The adjusted wage is calculated by adding (i) the current state hourly minimum wage rate to (ii) a percentage of that rate equivalent to the percentage increase in the United States Average Consumer Price Index for all urban consumers (CPI-U) published by the Bureau of Labor Statistics, or a successor index, over the most recent available calendar year. This adjustment ensures that the minimum wage keeps pace with inflation, and the adjustment amount cannot be negative.

Can your employer prevent you from sharing wage information with others?

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In the past, it was not uncommon for employers to enforce strict confidentiality policies that limited an employee’s ability to discuss their own wage or salary information with co-workers, presumably for the purpose of deterring requests for wage increases or concealing disparate pay structures.

Passed in 2020, Virginia Code Section 40.1-28.7:9 now holds that “no employer shall discharge from employment or take other retaliatory action against an employee because the employee (i) inquired about or discussed with, or disclosed to, another employee any information about either the employee’s own wages or other compensation or about any other employee’s wages or other compensation or (ii) filed a complaint with the Department alleging a violation of this section.” However, the law does specifically address restrictions on prior employees, thereby leaving open the issue of whether employers can enforce confidentiality provisions in settlement or severance agreements entered into post-termination.

On the national level, the National Labor Relations Act (NLRA) also prohibits employers from disciplining non-supervisory employees for discussing their pay with co-workers. The NLRA protects employees’ rights to engage in “protected concerted activities,” which includes discussing wages, benefits, and other working conditions with their colleagues.

In combination, these law provide protection for employees who discuss their wages with other employees, and employers who violate these protections can face legal consequences. Employees who believe they have been retaliated against for discussing their wages or for filing a complaint related to wage discrimination can file a complaint with the appropriate government agency or seek legal counsel.

2023 Minimum Wage Increase

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Historically, the Fair Labor Standards Act has created a national minimum wage for hourly employees. Though the federal minimum wage remains at $7.25 per hour, Virginia is now among the states that have set a higher minimum wage standard under state law. The Virginia Minimum Wage Act, passed in 2020, establishes incremental wage increases that will raise the minimum wage to $15 per hour by 2026. Effective January 1, 2023 the minimum wage in Virginia increases to $12 per hour. Absent amendments to the law, the next increase will occur in January 2025. Virginia law adopts federal exemptions under the FLSA and also includes its own exceptions, such a babysitters working fewer than 10 hours per week, students participating in a bona fide educational programs, golf caddies, taxicab drivers and persons employed in summer camps for children.

Can your employer avoid overtime payments by using an adjustable pay scheme?

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In U.S. Department of Labor v. Fire & Safety Investigation Consulting Services, the Fourth Circuit addresses an overtime claim where the employer utilized a “blended” pay scheme that changed depending on the total hours worked in a two week pay period.


The FLSA requires that covered employers pay their employees “at a rate not less than one and one-half times the regular rate for any hours worked in excess of 40 hours per workweek. At issue in this case was the definition of an employee’s “regular rate.” Typically, the regular rate is the hourly rate that the employer pays the employee for the normal, non-overtime forty hour workweek. However, in some cases, employers may attempt to assert that their pay scheme is intended to cover the base pay for all overtime hours.

In this case, the Fourth Circuit rejects the employer’s argument, cautioning that employers should not reply upon “creative” pay schemes that retroactively calculate overtime and non-overtime components for the benefit of the employer.


https://law.justia.com/cases/federal/appellate-courts/ca4/18-1632/18-1632-2019-02-08.html