On August 30, 2023, the U.S. Department of Labor (DOL) introduced a proposed rule that would increase the minimum salary required for an employee to be exempt under any of the so-called "White Collar Exemptions" from overtime under the Fair Labor Standards Act (FLSA).

Under the current rule, overtime pay (for any hours in excess of 40 hours per week) is required unless the employee is paid a salary of at least $35,568 per year ($684 per week). Under the proposed rule, the threshold for exemption from overtime pay would increase to $55,000 per year ($1,059 per week). The proposed rule does not include modifications to the duties required for an employee to qualify for one of the White Collar Exemptions.

The proposed rule also increases the salary threshold for those exempt under the FLSA as Highly Compensated Employees to $143,988 per year.

If the proposed rule goes into effect, the DOL anticipates that more than 3.5 million currently salaried employees across the country will no longer qualify for overtime exemption. As with the last increase to the FLSA salary threshold, if the proposed rule or a revised version is implemented, employers should prepare to assess who still qualifies for exemption and whether pay for some employees should be increased to continue to qualify for exemption.

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