Employers may need to adjust their pay practices now that the Labor Department has issued its long-anticipated proposal to raise the salary threshold for exempt employees – a change that could make more of your employees eligible for overtime premiums. The U.S. Department of Labor (DOL) announced today that it intends to significantly raise the exempt salary threshold from $684 per week to $1,059, meaning employees would need to earn $55,068 or more per year to be exempt from OT pay. An estimated 3.6 million U.S. workers would become eligible for overtime pay under the proposed rule.
DOL’s proposal also would increase the total annual compensation requirement for highly compensated employees to $143,988 per year. The proposal outlines an automatic update provision for future overtime thresholds beyond what is included in the proposed rule and would not make changes to the FLSA’s “duties test” for determining overtime eligibility. Once published in the Federal Register, the proposal will be subject to a 60-day public comment period.
