It’s long been a policy that employees are exempt from the Fair Labor Standards Act’s minimum wage and overtime protections if they are employed in a bona fide executive, administrative or professional capacity. To fall within this EAP exemption, an employee generally must meet three tests, according to the DOL:
- Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed
- Be paid at least a specified weekly salary
- Primarily perform EAP duties, as provided in the DOL’s regulations
The DOL’s regulations also provide an alternative test for certain highly compensated employees who are paid a salary, earn above a higher total annual compensation level and satisfy a minimal duties test.
The DOL covers current and future updates of these levels in a chart it has compiled, which is shown below. It’s a helpful reference, but be sure to work closely with payroll and accounting professionals to make sure you’re in full compliance.
| Date | Standard Salary Level | HCE Total Annual Compensation Threshold |
| Before July 1, 2024 | $684 per week (equivalent to $35,568 per year) | $107,432 per year, including at least $684 per week paid on a salary or fee basis |
| July 1, 2024 | $844 per week (equivalent to $43,888 per year) | $132,964 per year, including at least $844 per week paid on a salary or fee basis |
| Jan. 1, 2025 | $1,128 per week (equivalent to $58,656 per year) | $151,164 per year, including at least $1,128 per week paid on a salary or fee basis |
| July 1, 2027, and every three years thereafter | To be determined | To be determined |