Nov 18, 2024
The Department of Labor announced in April 2024 that it would increase the salary threshold required to exempt a salaried bona fide executive, administrative or professional employee from federal overtime pay requirements. According to a DOL release, "Effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888 and increase to $58,656 on Jan. 1, 2025." In April, the annual salary threshold was $35,568. The release further stated, "Starting July 1, 2027, salary thresholds will update every three years by applying up-to-date wage data to determine new salary levels."
But that is no longer effective. As the National Law Review reported, "On Nov. 15, 2024, Judge Sean D. Jordan of the United States District Court for the Eastern District of Texas ruled that the DOL exceeded its rulemaking authority by raising the minimum salary for exemption as an executive, administrative, or professional (EAP) employee under the Fair Labor Standards Act."
So, where are we?
The entire DOL rule seems to be gone, including the upcoming January increase and the three-year plan. Especially interesting is that the July raise has also been retroactively rolled back. In theory, employers that granted increases based on that change could now cancel those salary changes. However, such reductions may lead to employee resentment, so they may not be worth any savings.
Also, for many employers the issue may be moot: Some state and local jurisdictions already have higher salary thresholds in place, and this federal ruling has no effect on them.
The ink on the ruling is still wet, and lawyers are currently reviewing the lengthy ruling. We'll have more guidance as it becomes available. For now, the best advice is not to make any changes until you've spoken with qualified advisors.
©2024
Dec 20, 2024
Benefits can boost employee morale as well as loyalty to the job and your company, but some benefits come with tax implications. Read through to learn which benefits add to employee income so that you can withhold correctly and avoid penalties.
Dec 19, 2024
The Corporate Transparency Act was slated to affect many businesses in 2025 with some heavy-duty reporting requirements. But a court has just effectively stopped it, definitely for now, and possibly permanently. Read through for some details.
Dec 18, 2024
Form W-2 is the wage and tax statement that employers give to employees and to the IRS to show each employee's income earned and taxes withheld. Read through to better understand how the government uses the form.
Dec 17, 2024
It is important to understand the tax policies and initiatives that United States President-elect Donald Trump spoke about during his campaign. Some, all or even none of them may come to pass. Read through to see how the situation may change, so you can be prepared.
Dec 16, 2024
As it does every year, the IRS has made inflation adjustments to a variety of provisions. These take effect in 2025, and generally will be applicable when filing taxes in 2026. Read through for a summary of the main changes.
Nov 22, 2024
In a recent revenue procedure, the IRS announced changes to health savings accounts for 2025. Now is a good time to look at your situation and consider your options. Click through for a review of the changes.
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