The U.S. Department of Labor today issued a proposed rule raising the minimum salary an employee must receive to be considered exempt from overtime under the Fair Labor Standards Act. The FLSA allows certain exemptions from overtime, but only if the employee receives a minimum salary and performs specified duties.
The new proposed rule seeks to raise the minimum salary amount from its current level of $35,568 per year to $55,000 per year. The public has 60 days to comment before a final rule is issued, which could be several months after the comment period ends. And it is likely that employer groups will challenge any final rule incorporating this increase, as they did, successfully, when the Obama administration issued a similar proposal.
The bottom line is that the salary required to establish an exemption from overtime is likely going up, but not likely before 2024 and not necessarily to the level stated in this new proposed rule. Employers should begin to consider whether they are able to raise salaries for positions currently under the $55,000 threshold or will need to revise schedules to prevent currently exempt employees earning less than that amount from working more than 40 hours per week.
If you have questions about the proposed rule, please reach out to Liskow’s labor and employment team.
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