U.S. DOL Proposes Increase to Minimum Salary for Exempt Employees

The DOL estimates that 3.6 million workers exempt from FLSA overtime under the current regulations would become newly entitled to overtime protection under the FLSA.

On Aug. 30, 2023, the United States Department of Labor (DOL) released its highly anticipated proposed overtime rule. This rule, if finalized, would increase the minimum salary amount required to be paid to executive, administrative and professional (EAP) employees and the required annual compensation to be paid to highly compensated employees (HCEs) in order for these employees to be considered exempt from the Fair Labor Standards Act (FLSA) overtime pay requirements. The DOL is also proposing automatic updates to these amounts every three years.

The proposed rule does not include any changes to the standard duties test used to distinguish between FLSA-exempt and non-exempt employees. The DOL estimates that 3.6 million workers exempt from FLSA overtime under the current regulations would become newly entitled to overtime protection under the FLSA.

Is the DOL increasing the overtime threshold in 2023?

The proposed rule will be open for public comment for 60 days. The DOL will then issue a final rule, which is expected to take effect sometime in 2024. The final rule is likely to be challenged in court.

This article was provided by ADP. Read it on their site here.