CLIENT ALERT: Proposed New Department Of Labor Rule Could Be Costly
By: Tripp Scott's Paul Lopez and Jake Blumstein
On September 8, 2023, the Federal Register published the U.S. Department of Labor’s (DOL) Notice of Proposed Rulemaking to Define and Delimit the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The regulations under the Fair Labor Standards Act (FLSA) interpret and implement exemptions from minimum and overtime wage requirements, which are applicable to millions of employees throughout the United States. This proposal would extend overtime protections to many lower-paid salaried workers who were previously exempt.
The most important proposed revisions to the FLSA’s regulations are below:
Increase the salary basis requirement from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year);
Increase the total annual compensation requirement for highly compensated employees from $107,432 per year to $143,988 per year;
Automatically update earnings thresholds every three years; and
Restore overtime protections for U.S. territories, ensuring workers in those territories where the FLSA minimum wage applies have the same overtime protections as other U.S. workers.
The comment period for this proposal started on September 8, 2023 and will continue until November 7, 2023. If implemented without further revision, executive, administrative, professional, outside sales, and computer employees who make less than $1,059 per week will be entitled to overtime wages when they work more than 40 hours, even if they are paid a salary. While this is only a proposed rule, it could impact millions of workers and businesses. Below is a link to the proposed rule; please do not hesitate to reach out to us if you have any employment law questions.
