Last week, the U.S. Department of Labor (“DOL”) proposed an increase to the salary threshold required for executive, administrative and professional workers to qualify for overtime exemptions under the Fair Labor Standards Act (“FLSA”). Currently, the minimum annual salary figure required to qualify for such “white collar” exemptions is $23,660; that number is now expected to increase to $35,308 per year, or $679 per week. While the increase is substantial, it remains lower than the approximate $47,000 minimum salary proposed near the end of the Obama era. In addition, the DOL has also proposed an increase to the FLSA’s highly-compensated employee exemption from $100,000 to $147,414.
There will be a 60 day window for the public to provide the DOL with comments about the proposed rules. Once the rules go into effect, or some modified version thereof, employers will need to review their employment and payroll records to determine which employees may no longer qualify under the prior exemption thresholds and would therefore be entitled to overtime pay. Alternatively, employers may decide to increase salaries for those newly non-exempt individuals so as to bring them back above the exemption line. In either event, the DOL’s proposed rules will clearly have a significant impact on employers’ hiring, staffing and payroll decision-making.