On March 7, 2019, the U.S. Department of Labor (the DOL) issued a proposal to increase the salary threshold for employees to be classified as exempt from the overtime pay requirements of the federal Fair Labor Standards Act (the FLSA) pursuant to the so-called “white collar” exemptions — administrative, executive, and professional. Under the DOL proposal, the minimum salary for the white collar exemptions would increase from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). This means that employees who make less than approximately $35,000 per year would be automatically eligible for overtime in the amount of one and one-half times their regular hourly rate for all hours worked in excess of 40 in a workweek. The DOL also dramatically increased the salary level for the highly compensated employee exemption from $100,000 to $147,414. However, the DOL’s proposal does not include automatic annual increases to the minimum salary level or the highly compensated test. The DOL anticipates issuing a final rule later this year and that rule becoming effective sometime in January 2020.
