On September 8, 2023, the Department of Labor announced publication of a Notice of Proposed Rulemaking Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.
The DOL’s Wage and Hour Division is proposing to update and revise the Fair Labor Standards Act regulations implementing the minimum wage and overtime pay exemptions for executive, administrative, and professional employees. The proposed revisions include increasing the minimum salaries required to meet the “salary basis” and the highly compensated employee thresholds, as well as providing for automatic increases tied to national earnings data. Specifically, the proposed rules will increase the minimum salary for white collar exemptions from $35,568 to $55,068, and from $107,432 to $143,988 for the highly compensated employee exemption.
The DOL believes these changes will make an additional 3.6 million workers eligible for overtime.
Timing and Next Steps
Publication of the Notice triggered the start of a 60-day public comment period. When the comment period ends on November 7, the DOL will take any comments received into account and publish final rules that should become effective 60-days after publication. As with the last proposed DOL rule implementing similar increases, we anticipate the DOL’s proposed rule will be challenged in court by business groups.
While the road to a Final Rule will take several months and faces the uncertainty of litigation, employers are nevertheless advised to evaluate the impact of the proposed changes on their US workforce and pay practices. In the meantime, we will continue to monitor developments and issue further updates on the proposed rule.