In early March 2024, the U.S. Department of Labor’s (DOL) proposed overtime rule, announced in August 2023, entered its last stage of review. Publication of the final rule is expected soon. The rule would amend the requirements that employees in certain white-collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA).
The FLSA white-collar exemptions apply to individuals in executive, administrative, and some outside sales personnel and computer-related occupations. Some highly compensated employees (HCEs) may also qualify for a FLSA white-collar exemption.
To qualify for most white-collar exemptions, employees must meet the specified salary threshold, among other criteria. The DOL is proposing to increase the standard salary level from:
- $684 to $1,059 per week ($55,068 per year); and
- $107,432 to $143,988 per year for highly compensated employees (HCEs).
The rule would also enable the DOL to update the salary levels automatically every three years without having to rely on the rulemaking process.
Action Steps
Employers can expect the final rule to be published soon, and the DOL has indicated that the final rule will likely take effect only 60 days after its publication. Therefore, employers should begin to familiarize themselves with the proposed rule and evaluate what actions they may need to take before the effective date. This Compliance Bulletin summarizes the proposed changes and describes steps employers may take in anticipation of the final overtime rule.
Highlights
- The salary level for the executive, administrative and professional exemptions will increase to $1,059 per week ($55,068 per year).
- The compensation level for HCEs will increase to $143,988 per year.
- The rule would enable the DOL to update compensation thresholds automatically every three years.
- The proposed rule does not affect the duties test for the white-collar FLSA exemptions.
Important Dates
Aug. 30, 2023
The DOL proposed higher salary levels for white-collar exemptions from overtime.
March 1, 2024
The DOL’s proposed overtime rule entered its final stage of review.
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