DOL proposes another increase in overtime exempt salary threshold

In 2016, the U.S. Department of Labor (DOL) sought to implement regulations to increase the salary threshold for the Fair Labor Standards Act’s (FLSA) “white collar” overtime exemptions from $455 to $913 per week. The regulations also called for the threshold to be updated every three years. The first increase was scheduled to take place on December 1, 2016, but it was not to be.

Background

We all remember what happened next. HR professionals and managers across the country worked long hours to ensure their companies would be in compliance with the new regulations by transitioning workers who earned salaries of at least $455 per week, but less than $913 per week, from exempt to nonexempt status.

Less than two weeks before the regulations were to go into effect, however, a federal court granted a nationwide injunction to block the regulations. The court ruled the DOL had exceeded its authority by more than doubling the salary threshold.

Ultimately, the 2016 regulations never went into effect. Employers rejoiced. Employees mourned. HR professionals went to therapy.

In 2019, the DOL announced a final rule to increase the salary threshold to $684 per week ($35,568 per year). Notably, the rule didn’t include a provision for automatic updates. Unlike its predecessor, the final rule became effective January 1, 2020. It has been estimated that the rule caused more than one million workers to become eligible for overtime compensation.

Debating the Restoring Overtime Pay Act of 2023