The U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements employees in whitecollar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA).
Increased Salary Level
The FLSA white-collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white-collar overtime exemption.
To qualify for this exemption, white-collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white-collar employees must receive to qualify for the exemption.
The DOL is proposing to increase the standard salary level from:
$684 to $1,059 per week ($55,068 per year)
$107,432 to $143,988 per year for highly compensated employees
Automatic Updates
The DOL proposal also includes mechanisms that would allow the agency to update the white-collar salary level thresholds automatically every three years without having to rely on the rulemaking process.
Comment Period
The federal rulemaking process requires the DOL to allow the public to comment on proposed regulations before the agency adopts and implements final regulations. For this rule, the DOL has established a 60-day comment period.
Impact on Employers
The proposal does not impose any new requirements on employers at this time. This rule is likely to be challenged, and as such, employers should be cautious before proceeding with any changes. However, employers should become familiar with the proposed rule.