US Department of Labor proposal would significantly increase salary thresholds for exempt employees | Law
Through a proposed rule released August 30, 2023, the United States Department of Labor (the Department) announced that it intends to enact a substantial increase in the standard salary threshold employers must pay employees to satisfy the requirements for the “white-collar” overtime exemptions under the Fair Labor Standards Act (FLSA). Currently, the minimum salary threshold for those exemptions is $684 per week, or approximately $35,568 on an annual basis. The Department seeks to increase that amount to at least $1,059 per week, or $55,068 on an annual basis. This new, higher threshold would bring the nationwide standard much closer to the higher salary threshold required to meet exemptions in certain states, including New York.
Exempt from the overtime requirements of the FLSA are employees who work in executive, administrative, and professional capacities, commonly referred to as the “white-collar” exemptions. To qualify for the exemptions, employees must meet a duties test and, in most cases, be paid a minimum standard salary for each workweek.
The Department most recently updated the salary threshold for the white-collar exemptions in 2019 when it set the amount at $684 per week, or $35,568 on an annual basis. At the same time, the Department set the annual compensation requirement for the highly compensated employee (HCE)...
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