Understanding New Salary Thresholds for Overtime Exemptions: What Employers Need to Know


The first increase in the amount that must be paid to allow an employee, whose job meets one of the “duties” test, to be exempt from overtime goes into effect, barring any court stay, on July 1, 2024.  The salary thresholds are as follows:

Salary Threshold


Phase One – Effective July 1, 2024

Phase Two – Effective January 1, 2025

Duties Test Exempt


$844 per week ($43,888 annually)

$1,128 per week ($58,656 annually)

Highly Compensated Employees





Up to 10% of the required salary amounts may be satisfied by nondiscretionary bonuses, incentive payments and/or commissions, if these payments are made at least annually.

Each pay period an employer must pay the employee at least 90 percent of the minimum required salary. 

The Department recognizes that some businesses pay significantly larger bonuses; where larger bonuses are paid, however, the amount attributable toward the standard salary level is limited to 10 percent of the required salary amount for the workweek. Note, that this does not mean bonuses are capped. It only means that the amount an employer may credit against the weekly required salary is limited to 10%.


Employee A meets the duties test for an executive employee. Employee A receives a salary of $795.60 per week and two production bonuses; $1300 in June and $2500 in December. As a result, Employee A’s total salary for the year is:

$795.60 (salary) x 52 weeks = $41,371.20 amount paid in salary on a weekly basis.

$41,371.20 (salary paid) + $3,800 (Bonuses earned) = $45,171.20 (salary plus nondiscretionary bonuses paid).

Employee A received $795.20 per week on a salary basis, which is 90% of the required salary level. Employee A’s salary and nondiscretionary bonuses total $45,171.20, which exceeds the required salary level of $43,888 ($844 x 52 weeks) for that period. Because Employee A meets the duties test for an exempt executive and met the salary level requirements, Employee A is exempt from overtime pay for the year. 

For a detailed exploration of these exemptions and how they intersect with state regulations, particularly in audits concerning misclassification of employees, see our previous post on the implications of New Jersey Department of Labor audits.

TAKEAWAY: In preparation for the upcoming changes in salary thresholds for overtime exemptions, employers should ensure compliance to avoid potential misclassification risks. If you have questions contact Tracy A. Armstrong or any member of the Wilentz Employment Law Team.

Tag: Employment Law Update


The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services.  Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness.  The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.  Readers should not act upon this information without seeking professional legal counsel.

This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk.  We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability.  Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein.  We will remove a link to any site from this blog upon request of the linked entity.

We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.

If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com.  One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.

Sign Up

Tracy Armstrong Photo

Tracy Armstrong
Co-Chair, Employment Law Team