DOL Updates to FLSA: What It Means for Commercial Cleaning Services

On April 23, 2024, the U.S. Department of Labor (DOL) finalized a major update to the Fair Labor Standards Act (FLSA) that changes how exempt employees are classified and paid. With more than four million workers expected to be affected, these updates are especially important for organizations that manage or contract commercial cleaning services.

Understanding what's changing—and how it impacts costs—can help facility leaders and procurement teams plan ahead.

The Current Framework

To qualify as exempt from overtime under the FLSA's executive, administrative, or professional categories, employees must meet three key standards:

Job Duties: Perform specific "white-collar" responsibilities, which often include supervisory or managerial roles such as field leaders or site managers in the cleaning industry.

Pay Structure: Be compensated on a salary or fee basis, rather than hourly wages.

Salary Threshold: Earn at least $684 per week (about $35,568 annually), a range commonly seen among field leadership roles in commercial janitorial operations.

What the DOL's Final Rule Changes

After proposing updates in August 2023, the DOL confirmed a phased increase to the salary thresholds in April 2024. The changes roll out in two stages:

Starting July 1, 2024: The weekly minimum rises to $844 (approximately $43,888 per year). Many companies will need to adjust, though some already meet or exceed this level.

Starting January 1, 2025: The threshold increases again to $1,128 per week (about $58,656 annually).

The rule also introduces automatic updates every three years beginning July 1, 2027, based on national earnings data, with flexibility to account for broader economic conditions.

For commercial janitorial companies, these increases are expected to raise operating and payroll costs across the board.

What Could Happen Next

Although the July 1, 2024, date is set, legal challenges or changes in federal leadership could influence how the rule is implemented—similar to what has happened with past labor regulations.

How Janitorial Companies Are Preparing

Many professional cleaning providers are already taking steps to stay compliant and manage costs, including:

Reviewing which exempt employees may no longer qualify under the new salary levels.
Estimating the financial impact of reclassification or wage increases.
Deciding whether to adjust salaries, change job classifications, or restructure workloads.
Phasing in pay changes to align with both the July and January thresholds.
Exploring cost-control strategies to offset higher payroll expenses.
Updating timekeeping policies and training for employees who may move to hourly status.
Monitoring state labor laws that may impose stricter standards than federal rules.

In Conclusion

The DOL's updated rule represents a significant shift for employers and service providers alike. Proactive planning will be essential to maintain compliance, manage rising costs, and minimize operational disruption.

As these changes take effect, many vendors may also approach clients about potential price adjustments to help cover a portion of the increased labor expenses—making early conversations and budget planning more important than ever.