Labor Department Releases Overtime Proposed Rule

Posted: Sep 06 2023

The U.S. Department of Labor has released a proposed rule that would significantly increase the number of employees who are subject to the Fair Labor Standards Act’s overtime and minimum wage requirements. Under the proposal, employees who earn up to $1,059 per week, or $55,068 annually, would automatically be subject to these requirements. Current regulations issued in 2019 set the salary level at $684 per week, or $35,568 annually. Above that level, an employee may be exempted from federal overtime and minimum wage requirements if the employee performs certain duties.
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The proposal also would require DOL to automatically update the salary level every three years. In addition, the proposal would increase, to $143,988, the amount of income an employee must receive to be classified as a “highly compensated employee,” or HCE. An employee who earns a salary above the HCE threshold is subject to a less stringent “duties test” to be exempted from federal overtime and minimum wage requirements.
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The Partnership to Protect Workplace Opportunity, a critic of the proposal, believes “this rulemaking will lead to a substantial reduction in access to entry level executive, administrative and professional salaried positions. It will reduce opportunities, especially for recent graduates and younger professionals hoping to begin their careers.”

To read the proposal, visit: https://www.dol.gov/agencies/whd/overtime/rulemaking