On June 30, the U.S. Department of Labor released its long-awaited Notice of Proposed Rulemaking (NPRM), which contains a new minimum salary threshold for workers to qualify for “white-collar” exemptions to the Fair Labor Standards Act (FLSA) overtime requirements. Most significantly, the DOL’s proposed new minimum salary threshold for the “executive,” “administrative” and “professional” exemptions from overtime pay, which are pegged to the earnings percentiles for full-time salaried workers, would more than double the current salary basis of $23,660 per year ($455 per week). The DOL also proposed raising the salary floor for the “highly compensated employee” (HCE) exemption.
The proposed changes, should they be contained in the DOL’s Final Rule, will have a wide-ranging impact on workers and businesses. Consequently, employers should begin preparing today for the likelihood that a significant number of additional employees will be overtime-eligible under the FLSA. In fact, DOL Secretary Thomas E. Perez has stated that “on an annual basis, workers will get roughly $1.2 to $1.3 billion in additional wages as a result of this rule.”
Background
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