On August 30, 2023, the U.S. Department of Labor (DOL) released a Notice of Proposed Rulemaking (NPRM) that would significantly raise the minimum weekly salary to qualify for one of the Fair Labor Standards Act’s (FLSA) three white-collar exemptions. If the changes go into effect, they would have a significant impact on how employers pay their employees and who is or is not entitled to overtime pay.

Specifically, the DOL proposes raising the weekly salary by over 50 percent from $684 per week to $1,059 per week (which is the equivalent to an annual salary of $55,068). The DOL also seeks to increase the annualized salary threshold for the exemption for “highly compensated employees” (HCE) from $107,432 per year to $143,988 per year. Finally, the DOL proposes automatically updating these earnings thresholds every three years.

Quick Hits

• The DOL seeks to increase the standard salary level for exempt white-collar executive, administrative, and professional employees from $684 to $1,059 per week.
• The DOL seeks to increase the total annual compensation requirements for the “highly compensated employee” exemption from $107,432 to $143,988 per year.
• Finally, the DOL seeks the implementation of a mechanism that would automatically update these earnings thresholds every three years.

Current Law

Unless specifically exempted by the FLSA, all employees must receive overtime pay for all hours worked in excess of forty in one workweek. Under current law, employees can be exempt from...

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