The Department of Labor (DOL) has issued proposed regulations that would update the Fair Labor Standards Act (FLSA) rules regarding the overtime pay exemption for executive, administrative and professional employees, along with a related News Release and Frequently Asked Questions. Currently, salaried workers earning less than about $35,000 a year are eligible to receive overtime pay for hours worked over 40 in a workweek. Under the proposal, overtime pay would be extended to those earning less than about $55,000 a year.
The DOL will be accepting comments until November 7, 2023. The effective date is expected to be 60 days after the final rules are published.
Specifically, the DOL is proposing the following changes:
As background, in 2016, a U.S. district court issued a nationwide injunction to stop fairly extensive changes made by the DOL to the overtime rules. The 5th U.S. Circuit Court of Appeals temporarily placed a hold on an appeal while the DOL undertook further rulemaking to redetermine appropriate salary thresholds. The DOL finalized these new thresholds in September 2019 and is now updating the 2019 rules.
According to the DOL, the proposed changes would extend eligibility for overtime pay to approximately 3.65 million salaried workers. Note, however, that the higher salary thresholds will not affect workers where the state thresholds already exceed the proposed federal thresholds.
Employers may want to begin considering the potential impacts of the proposed rules but hold off on implementing them before they are finalized, as they could face legal challenges.
