Guide: How to Update Jobs for New FLSA Exemption Requirements

UPDATED 12/1/24 – Courts Invalidate DOL OT Rules Nationwide; EAP minimum salary thresholds remain unchanged. Read more here

This guide provides practical tips for meeting the latest FLSA requirements for exempt employees. Mosh JD clients use this process to ensure that their company’s job descriptions showcase their compliance with DOL standards.

If you are a compensation or HR leader of an organization with even one exempt employee, this guide is for you.

Before we get started: let’s review the new OT requirements:

Overview of the Final Rule

On July 1, 2024, the Department of Labor’s final rule on overtime exemption went into effect for all US employers. Here’s a summary of the changes outlined in the final rule:

Seems straightforward, but there are actually a lot of things here to consider. Follow the steps below and your organization will be in good shape.

Disclaimer: Mosh JD and its affiliates do not provide labor compliance, human resources, or legal advice. This material is prepared for informational purposes only, and is not intended to provide, and should not be relied on for labor compliance, human resource, or legal advice. You should consult your legal advisors before engaging in any related activities or transactions.

1️⃣ Identify the Exempt Jobs (EAP & HCE only)

First things first, you need to know which positions in your company are currently classified as exempt from overtime within the executive, administrative, or professional (EAP) and highly compensated employees (HCE) categories.

Your HRIS platform or payroll system should have reports that can help with this.

If not, you’ll need to review your job descriptions one by one to identify all the exempt positions at your organization.

If your job descriptions are stored in Microsoft SharePoint, Google Drive, or a similar file storage platform, use a file naming system or folder structure to clearly organize your job descriptions according to their FLSA classification.

You can also use a tool like Mosh JD to easily sort your entire job description catalog by FLSA classification.

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2️⃣ Check If Your Exempt Jobs Meet the New Salary Minimums

Now that you’ve identified all the EAP and HCE-exempt jobs, it’s time to verify that the salary of all employees in those positions meets the new requirements.

As mentioned in the table above, the minimum salary for EAP-exempt positions is now $844 per week (that’s $43,888 a year), and the total compensation for HCE-exempt positions is now $132,964 per year.

If any of your EAP or HCE-exempt employees are making less than those minimums, you’ve got some decisions to make, starting with Step 3 below.

What to Do Now:

• Compare the salaries of all EAP & HCE exempt employees to the new minimums.
• Flag any positions/employees that don’t meet the new requirements.

3️⃣ Decide Whether to Increase Salaries or Reclassify Jobs

For any exempt employees who don’t meet the new salary thresholds, you’ll need to decide: do you increase their pay, or do you reclassify them as non-exempt?

The answer will likely come down to how much overtime they typically work.

This can be challenging since exempt employees at many organizations don’t track their overtime. In this scenario, your best bet is to require affected employees to track their hours across at least two pay periods so you have enough data to make a decision.

If an employee works a lot of overtime, it might be more cost-effective to raise their salary.

If they rarely clock extra hours or their salary is far below the new requirement, reclassifying them as non-exempt and switching to paying them an hourly rate plus overtime might be the way to go.

Easy Button

Use this helpful calculator to quickly compare the estimated cost of reclassifying employees vs. increasing their salaries to meet the new minimums (H/T ADP).

4️⃣ Prepare and Make Salary Adjustments

→ If you’d like to reclassify jobs instead of changing salaries, skip ahead to Step 5.

→ If you’ve chosen the salary-increase route, start by asking yourself these three questions:

1. Can I adjust salaries on an individual-employee basis, or do I need to modify the salary range for all employees in that position?
2. Do I need to add new responsibilities to the job description to justify a higher salary?
3. Do I want to go ahead and make the full jump to the January 1, 2025, salary requirements now, or make one increase now and another in January?

Once you’ve answered those questions, it’s time to decide what your new salaries and ranges will be. Your organization may have its own methods for calculating those, but if you need assistance, tools like BetterComp can help you create and manage your salary ranges to make sure they are competitive, equitable, and compliant.

Looking to simplify the job description management process? Schedule a call to see if Mosh JD can help.

5️⃣ Reclassify Jobs as Non-Exempt

If you’ve opted to reclassify any of your exempt employees as non-exempt, the first thing you’ll need to do is decide exactly which jobs you want to reclassify.

Review Step 3 above to guide your thinking—you might decide that some of your exempt positions should remain exempt while others should become non-exempt.

Next, use the equation below to calculate hourly rates for your new non-exempt positions that will keep your costs roughly the same as they are now:

Remember, whatever hourly rates you decide on, they must meet or exceed the highest applicable minimum wage, whether that’s federal, state, or local.

Once you’ve determined your new hourly rates, it’s crucial to update the job description for each position you’ve reclassified. Follow the steps below to make this happen:

1. Compile all of your organization’s job descriptions in one place, such as a SharePoint or Google Drive folder.
2. Review each job description and flag each one that you’ll be changing from exempt to non-exempt.
3. Change the FLSA classification listed in the job description.
4. Update the compensation rates in the job description from salary to hourly.
5. Edit job duties as needed to reflect any changes of responsibilities you deem necessary.
6. Save the updated job description.
7. Make the new job description available to affected employees (see Step 7 below).
8. Update FLSA classification and compensation information in each of your public-facing job postings.

BONUS: Make life a little easier for yourself in the future by creating a file nomenclature that allows you to sort your job descriptions by FLSA classification. For example, you could call each file “Exempt JD_JobTitle_RevisionDate” or “NonExempt JD_JobTitle_RevisionDate”.

Pro Tip: Use a tool like Mosh JD to simplify your job description management and easily organize your entire job description catalog by FLSA classification or by several other properties, including location, department, and salary range.

6️⃣ Review Your Exempt Job Descriptions

This is a great time to review each job description for your exempt positions to verify that they all contain language that satisfies the duties test for executive, administrative, or professional exemptions.

Here’s a step-by-step guide on how to do just that:

1. If you haven’t already done so, compile all of your organization’s job descriptions in one place, such as a SharePoint or Google Drive folder.
2. Identify each job description that’s classified as exempt.
3. Open each exempt job description, one by one, and verify that it contains language that clearly satisfies the corresponding **duties test** (toggle the arrows below to reveal requirements for each exemption type):

Executive Exemption

• • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $684 per week;
  • The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemption

• • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
  • The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption

To qualify for the learned professional employee exemption, all of the following tests must be met:

• • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
  • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

4. If any job description does not clearly satisfy the duties test, use the table below to help write language that you should insert into your job descriptions for executive, administrative, and professional (EAP) exempt positions, to make it abundantly clear that each position satisfies the duties test.

Dreading the time it’ll take to update your job description catalog? Schedule a call to see if Mosh JD can help.

7️⃣ Communicate Changes to Your Team

As an HR or compensation professional, you know better than anyone that communication around salary changes can be extremely sensitive. That being the case, here are a few tips to guide you as you prepare your messaging:

• Be clear, transparent, and timely when notifying employees about what’s happening.
• Publish updated job descriptions on your company intranet, SharePoint, Google Drive, or in your **Mosh JD** job description catalog so all employees can see the latest version.
• Anticipate questions and concerns your employees might have, and include an FAQ section in your first communication so your inbox doesn’t get flooded with emails.
• Explain how the salary changes might impact eligibility for future merit increases or cost-of-living adjustments.
• Let affected employees know if they’ll qualify for any retroactive pay for the time that has elapsed since the final rule took effect on July 1, 2024.
• If you’re reclassifying anyone, keep in mind that they might perceive the reclassification as a demotion, since many employees attach some level of prestige to the exempt status. You can mitigate this by emphasizing how they will benefit from their new non-exempt classification, most notably by receiving overtime pay. You may also need to train them on how to use your organization’s timekeeping system to track their hours, approve timecards, etc.

Check out these tips for even more guidance on communicating these changes successfully.

8️⃣ Set Yourself Up for Future Success

The DOL plans to update these salary thresholds every three years, so now is a good time to think ahead.

What should you do to make this whole process easier for yourself in 2027 and beyond?

Here are a few ideas for you:

• Create a calendar reminder right now to review exempt job descriptions a year from now and verify that they all still contain language that satisfies the FLSA duties test.
• Explore some of the tools already mentioned in this guide to manage your job descriptions (Mosh JD) and your compensation strategy (BetterComp).
• Rename your job description files so they can easily be sorted by FLSA classification.
• Update the language in your offer letter and employment agreement to state that each employee’s FLSA classification may be subject to change.
• Watch for an announcement from the DOL in early 2027 that outlines the latest salary thresholds.

Kudos to you for taking strides to ensure that your exempt positions are in full compliance with the latest FLSA requirements!

Get our free 8-step checklist to guide you through this process. Download FLSA Checklist 

Joshua Kiernan Co-Founder and CEO

Josh Kiernan has spent over 15 years helping HR and compensation teams simplify tasks with technology; saving them time so they can focus on what they care about most. At Mosh JD, he leads the effort to simplify job description management so HR teams can maintain hundreds of accurate job descriptions without thousands of hours of work.

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