On August 30, 2023, the United States Department of Labor (the “DOL”) announced a notice of proposed rulemaking to increase the minimum salary requirements for executive, administrative, and professional workers from the minimum wage and overtime pay requirements under the Fair Labor Standards Act (the “FLSA”).

Currently, certain executive, administrative, and professional workers are exempt from minimum wage and overtime pay requirements under the FLSA if they (1) are paid on a salary basis at a rate of not less than $684 per week and (2) perform specific duties that are exempt under the FLSA and corresponding regulations. Employees who are not exempt under this test are required to be paid time-and-a-half for any hours worked more than forty hours in a week.

The proposed rule raises the salary basis threshold from $684 per week, an annual salary of approximately $35,500, to $1,059 per week, an annual salary of $55,068. The proposed rule also increases the salary threshold for the highly compensated employees exemption to $143,988 annually. Further, the rule proposes an automatic update of the salary thresholds every three years in an effort to reflect current earnings statistics.

According to the news release issued by the DOL, this change would extend overtime protections to an additional 3.6 million salaried workers.

Employers should review the salaries of their current employees and begin developing a plan to address these changes if they have employees whom this rule change will impact. The attorneys at Erickson Sederstrom can assist in determining how these rules will impact your business and how to address this new rule when it goes into effect.