HR News: DOL Proposed Salary Threshold Increase
August 31, 2023

Department of Labor Proposes to Increase the Minimum Salary Threshold for Overtime Eligibility

On Wednesday, August 30, 2023, the U.S. Department of Labor (DOL) unveiled a proposal to increase the minimum salary threshold for overtime eligibility under the Fair Labor Standards Act (FLSA) to $55,068 annually from the current threshold of $35,568. This adjustment would guarantee overtime pay for most salaried employees earning less than $1,059 weekly. The department is also proposing automatic increases every three years to the overtime threshold.

Moreover, the proposal suggests raising the minimum annual salary for the Highly Compensated Employee (HCE) exemption from $107,432 to $143,988.

The DOL’s proposal for the new overtime rule follows extensive engagement with employers, workers, unions, and other stakeholders, including 27 listening sessions involving over 2,000 participants to inform the rule.

The Proposed Rule Aims to Achieve Three Key Objectives:

  1. Restore and Extend Overtime Protections: It seeks to provide overtime protections to low-paid salaried workers, ensuring they receive time-and-a-half compensation for hours exceeding 40 per week.
  2. Identify Non-Exempt Employees: By better identifying which employees should be exempt from overtime pay (executive, administrative, or professional roles), the proposed rule intends to provide these non-exempt workers with more time for their families or extra compensation for hours beyond the 40-hour workweek.
  3. Ensure Predictability: The rule proposes automatic updates to the salary threshold every three years to align with current earnings data, preventing future erosion of overtime protections and enhancing predictability.

Once published in the Federal Register, the notice of proposed rule-making will be open for public comment for 60 days before the DOL finalizes the rule.