On Wednesday, the U.S. Department of Labor (DOL) formally announced its Final Rule that slightly more than doubles the minimum salary threshold for “executive,” “administrative” and “professional” employees to qualify as exempt from overtime pay under the Fair Labor Standards Act (FLSA) from $455 per week (or $23,660 per year) to $913 per week (or $47,476 per year). The Final Rule also provides that the salary level to remain exempt will be automatically updated every three years.
The DOL estimates that the Final Rule, which is set to become effective Dec. 1, will extend overtime pay eligibility to 4.2 million workers and result in $1.2 billion a year in additional wages paid to employees. The DOL also estimates that this will make 35 percent of full-time salaried workers automatically entitled to overtime based on salary alone (up from what the White House estimates is 7 percent currently).
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