On August 30, the Department of Labor’s (DOL) Wage and Hour Division released a proposed rule that would revise the federal regulations under the Fair Labor Standards Act (FLSA) relating to exemption from overtime pay requirements for executive, administrative, and professional employees (known as the “white collar” overtime exemption).

As a reminder, for an employee to fall within the exemption three conditions must be met:

• the employee must be paid a salary, meaning a predetermined and fixed amount
• the person must be paid a weekly salaried amount that is equal to or greater than a level specified in the regulations, which currently is $684 per week ($35,568 per year)
• the person must primarily perform executive, administrative, or professional duties, as defined in DOL Department’s regulations

DOL’s proposed rule would significantly increase the FLSA regulation’s standard salary level from $684 to $1,059 per week, or from about $35,500 to about $55,000 per year for a full-time employee. It would also increase the total annual compensation requirement for highly compensated employees from $107,432 to $143,988 and automatically update these earnings thresholds every three years with current wage data.  DOL is not proposing any changes to the standard duties test.

A 60-day comment period will open upon publication of the proposed rule in the Federal Register, which is expected soon.  LeadingAge is preparing a detailed summary of the proposal, and we will work with members in the weeks ahead to analyze the proposed rule’s impact and develop comments for submission.