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Such meetings should be used to resolve any operational or personality problems facing the house. This rule will not have tribal implications under Executive Order that would require a tribal summary impact statement. The rule would not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The Department expects that this rule could lead to multiple benefits, which were discussed qualitatively in the NPRM.

E. Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Rule

Given this, and because there is no data and literature to quantify any potential costs to workers, the Department did not quantify these costs. The Department received many comments addressing the adequacy of the current salary and compensation thresholds set in the 2019 rule and the need for this rulemaking. By contrast, most employers and affiliated stakeholders opposed the main aspects of the proposal, with many urging the Department to withdraw the NPRM altogether. Some employers supported the proposal, or stated that they would support, or not oppose, some change to the current thresholds. Regarding costs, regulatory familiarization costs are lower without updating because, in the absence of updating, employers would not need to familiarize themselves with updated salary and compensation levels every 3 years. Adjustment costs and managerial costs are a function of the number of affected EAP workers and so will be higher with updating.

Table 28—Number of Entities and Employees by SBA Size Standards, by Industry and Employer Type

Although failing to exclude workers who work for non-covered enterprises would only affect a small percentage of workers generally, it may have a larger effect (and result in a larger overestimate) for workers in nonprofits because when determining FLSA enterprise coverage only revenue derived from business operations, not charitable activities, is included. (2) Beginning on January 1, 2025, $151,164 per year (the annualized earnings amount of the 85th percentile of full-time nonhourly workers nationally). (1) Beginning on July 1, 2024, $132,964 per year (the annualized earnings amount of the 80th percentile of full-time nonhourly workers nationally). First, using CPS MORG data, the Department identified those who do not usually work overtime but did work overtime in the survey week (the week referred to in the CPS questionnaire, variable PEHRACT1 greater than 40). Next, the Department supplemented the CPS data with data from the Survey of Income and Program Participation (SIPP) to look at likelihood of working some overtime during the year. Based on 2021 data, the most recent available, the Department found that 31.3 percent of non-hourly workers worked overtime at some point in a year.

business hours

To achieve this goal, the Department is not only updating the single standard salary level to account for earnings growth since the 2019 rule, but also to build on the lessons learned in its most recent rulemakings to more effectively define and delimit employees employed in a bona fide EAP capacity. To this end, the Department is finalizing its proposed changes to the standard salary level and the HCE test’s total annual compensation requirement methodologies. Additionally, to maintain the effectiveness of these tests, the Department is finalizing an updating mechanism that will update these earnings thresholds to reflect current wage data, initially on July 1, 2024 and every 3 years thereafter.

• Nevertheless, significant issues raised by representatives of small businesses are also addressed here.
• Unlike regulatory familiarization and adjustment costs, which occur primarily in Year 1, managerial costs are incurred more uniformly every year.
• The resulting salary level will work effectively with the standard duties test to better define who is employed in a bona fide EAP capacity.
• Providers invest significant time and energy in creating a safe, sustainable discharge plan for their clients, only to recommend a home that is peer run, dirty and potentially has people using in it.

The Department did not replicate this analysis for the salary level increase in the 2019 final rule, because it would require comparing a quarter in 2019 before the effective date of the rule with a quarter in 2020 after the effective date. The economic effects of the COVID-19 pandemic would make it impossible to isolate the impact of the 2019 rule. Potentially affected women, Black workers, Hispanic workers, young workers, and workers with less education are all more likely to be affected than other worker types. This is because EAP exempt workers with these characteristics are more likely to earn within the affected standard salary range than EAP exempt workers without these characteristics. For example, of potentially affected workers, women tend to have lower salaries and are therefore more likely to be in the affected range. The 292,900 workers affected by the change in the HCE compensation level average 2.9 hours of overtime per week and earn an average of $2,397 per week ($124,668 per year).

Figure 1—Flow Chart of FLSA Exemptions and Estimated Number of Affected Workers

The Department expects that businesses that would be faced with large increases in payroll costs if they were to increase salaries to the new threshold would instead find other responses more economically feasible, such as limiting the number of overtime hours worked by nonexempt workers. Despite the inability to incorporate these survey results into the analysis, select results are presented here. Would increase the salary of full-time exempt workers to meet the projected threshold,” “49 percent . And NDA stated that 66 percent of respondents “said they would have to reclassify exempt employees as hourly employees and restructure jobs if DOL raised the minimum salary threshold” as proposed in the NPRM.

• The opportunity for a house to democratically function requires periodic meetings within the house — at least once a week.
• The Department believes that while some workers may see an increase in hours, others may see their hours decline (discussed further in the Benefits section below).
• The Department thus believes, consistent with its approach in the 2016 and 2019 rules, that 1 hour is an appropriate average estimate for the time each entity will spend reviewing the changes made by this rulemaking.
• In its NPRM, the Department proposed to update the salary level by setting it equal to the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (the South), resulting in a proposed salary level of $1,059 per week ($55,068 for a full-year worker).

This is because the financial activities industry is heavily composed of salaried white-collar workers. As a share of potentially affected workers, the industry with the highest share affected is leisure and hospitality (24.3 percent), followed by agriculture, forestry, fishing, & hunting (22.8 percent). Except for the specific provisions discussed in this section that will become applicable on January 1, 2025, all other provisions of this final rule will be applicable on the effective date on July 1, 2024. Rent and the various utilities paid by residents vary by location, but the cost of living in an Oxford House is usually no more than what it would cost to live elsewhere. Plus, this option may actually be cheaper than other housing environments given the fact that residents split the household costs among several residents. The Department has reviewed this rule in accordance with Executive Order regarding federalism and determined that it does not have federalism implications.

Applying this methodology to calendar year 2023 earnings data results in a total compensation threshold of $151,164 per year. This approach will guard against the unintended exemption of workers who are not bona fide executive, administrative, or professional employees, including those in higher-income regions and industries. Second, the new salary level will result in overtime protections for an additional 2.2 million currently exempt workers who meet the standard duties test and earn between the long oxford house traditions test salary level ($942 per week) and the final salary level. As explained earlier, the Department is setting the standard salary level above the long test level to account for the shift to a one-test system in a manner that reasonably distributes the impact of this switch. The final rule will limit the number of affected workers by setting a standard salary level below the midpoint between the long and short test salary levels and by using earnings data from the lowest-wage Census Region (the South).