US DOL Proposes Rule To Increase Exempt Employees’ Minimum Salary Level

On August 30, 2023, the US Department of Labor (DOL) issued its long-awaited proposed Rule to increase the salary threshold required for employees to be exempt from overtime under the Fair Labor Standards Act (FLSA). To satisfy the requirements for the executive, administrative or professional (EAP) exemption, employees must meet certain tests regarding job duties and generally must be paid on a salary basis in an amount that is at least the amount specified in the DOL regulations.

Under the DOL’s proposed Rule, the salary level required for the EAP exemptions would increase from the current salary of $35,568 annually ($684/week) to $55,068 annually ($1,059/week) for a full-time worker. The DOL’s proposed Rule includes raising the total annual compensation requirement for the Highly Compensated Employee (for whom less duties are required) to the annual salary of $143,988.

The DOL also proposes to include an “automatic updating mechanism” that would increase the salary threshold every 3 years.

It is estimated the Rule, if finalized, would render approximately 3.6 million workers currently classified as overtime exempt eligible for overtime under the FLSA.

Interested parties may comment to the DOL for sixty (60) days following the publication of the proposed Rule in the Federal Register. There will almost certainly be legal challenges to the Rule. Legal challenges to prior DOL overtime rules were successful, but it is uncertain if they will succeed in this instance.

Employers with questions about the Rule may contact the attorneys at Wimberly Lawson for additional information and analysis.