1 minute read
A recent U.S. Department of Labor (DOL) final rule raises salary thresholds for executive, administrative, and professional (EAP) employees, potentially leading to more employees qualifying for overtime pay. Employers should consider how this may impact their benefit offerings.
Employers may need to reevaluate the following:
- How their retirement plan defines “compensation: If the employer’s retirement plan includes overtime pay in its definition of compensation, more employees may be eligible which could result in increased retirement plan contributions. The increase could also affect the determination of highly compensated individuals for nondiscrimination testing purposes, and
- Whether eligibility for other benefits depends on exempt status: If health benefits eligibility depends on exempt status, more nonexempt workers may become eligible.
Important Dates
Here are some important dates when salary levels will increase for highly compensated employees (HCEs).
- July 1, 2024: The salary level for EAP employees will increase to $844 per week and $132,964 per year for HCEs
- January 1, 2025: The salary level for EAP employees will increase to $1,128 per week and $151,164 per year for HCEs
Action Steps
Employers should review retirement and health plan documents to assess how the final rule may impact benefit offerings. While they can prepare for the rule now, it's advisable to hold off on implementing changes due to expected legal challenges. Download the bulletin for more details.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
