On August 30, 2023, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking to revise the stipulated salary requirements under the Fair Labor Standards Act (FLSA). Aimed at updating salary and annual compensation requirements for certain employees, this proposal specifically targets those subject to executive, administrative or professional exemptions; categories commonly known as “white collar” exemptions. Notably, this proposed rule change could also impact computer employees classified as exempt who are salaried.
The FLSA prescribes standards for basic minimum wage and overtime pay, which impact employees in the private sector and in federal, state, and local governments. Under this law, covered nonexempt workers are entitled to a minimum wage of no less than $7.25 per hour. Overtime pay at a rate of no less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
The exemptions to FLSA for executive, administrative, and professional employees are based on both salary level and job duties. If an employee meets the requirements for these exceptions they are not entitled to overtime pay irrespective of the number of hours worked.
The DOL’s proposed rule revises the criteria that exempt employees must meet to include an increased minimum salary level. While this ruling is still in the proposal phase, it provides an opportunity for businesses and workers to understand potentially upcoming wage changes. The full impact of this proposal remains to be seen and hinges on the conclusion of the rulemaking process.
For further information and ongoing updates on this developing issue, click here to access the original news piece by Hinshaw & Culbertson – Employment Law.