The U.S. Department of Labor (DOL) released a Notice of Proposed Rulemaking (NPRM) that would increase the minimum weekly salary to qualify for one of the exemptions under the Fair Labor Standards ACT (FLSA). Specifically, it proposes raising the weekly salary from $684 to $1,059 per week, which would be more than a 50% increase.
The DOL also aims to increase the annualized salary threshold for the exemption of highly compensated employees from $107,432 to $143,988. It proposes to make automatic updates to these earning thresholds every three years.
Employees must receive overtime pay for hours worked in excess of 40 hours in a workweek, unless exempted under the FLSA. Exempt employees include those who qualify under one of the three main white-collar OT exemptions (executive, administrative, professional).
Employees are exempt if they are paid on salary and earn at least $684 per week (or $35,568 per year), or primarily perform executive, administrative, or professional duties (as defined by DOL regulations). Highly compensated employees are also currently exempt from OT rules if they make at least $107,432 annually and perform at least one of the exempt responsibilities defined in the exemption.
All interested parties, including employers, are invited to submit written comments in response to the proposed rule. The submission deadline expires 60 days after the publication, which occurred on September 8, 2023.
There is currently no estimated timeline for this rule to go into effect, as it depends on the comments received and future plans. We will continue to provide updates as they become available.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.