The US Department of Labor (DOL) on April 23 released the new final rule changes governing the classification of employees as Salaried (Exempt) and Hourly (Non-Exempt). These regulations apply to all employers including churches.
The new requirements raise the minimum compensation for an employee to be classified as Salaried (Exempt) from the current level of $35,568 to $58,656. Employees earning less than this annually are required to be classified as Hourly (Non-Exempt), and are eligible for (1.5X) overtime for hours in excess of 40 in a work week.
This is being implemented in two phases to make it easier for employers:
Phase I – Effective 7/1/24 the threshold is increased from the current $35,568 to $43,888
Phase II – Effective 1/1/25 the threshold is increased from $43,888 to $58,656
Employers have the option of 1) increasing salaried (exempt) employee’s compensation to meet these new requirements, or 2) reclassifying them as hourly (non-exempt) making them eligible for overtime (1.5X) for all hours over 40 per week. Â
As is already the requirement, employers are required to track/capture hours worked for all hourly (non-exempt) employees to ensure that any overtime hours above 40/week are paid at 1.5X the normal hourly rate. Â
Have Questions? We’re here to help!
BMA Financial Insurance Services is your trusted partner that can help bring clarity and understanding to whatever your situation may be. Let us help explain your options.
Our focus is on educating our churches and pastors to help them make well informed decisions about these very important topics. Â Â
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Mark Bradley
BMA Financial - Insurance Services
501.499.4205
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