Department of Labor Proposes New Overtime Thresholds

On August 30, 2023 the Federal Department of Labor (DOL) issued a notice of proposed rulemaking that would raise the salary threshold necessary to be exempt from overtime from $35,568 to $55,068 per year. Thereafter, the salary threshold would increase every three years to reflect current earnings data.

The raise in the salary threshold would expand overtime eligibility to about 3.6 million workers. Furthermore, the proposed rule would increase the total annual compensation requirement for highly compensated employees to $143,988 per year. The “duties” test for salary exempt employees would remain unchanged.

The salary threshold has historically fluctuated depending on the political party in power. For example, the Obama Administration had attempted to raise the salary threshold to $47,000, but this attempt was ultimately struck down by the federal courts. This new proposal by the Biden Administration may suffer the same fate.

The DOL will take comments for 60 days after the proposed rule is published in the Federal Registrar. After reviewing the comments, the DOL will publish its final rule.

The notice of proposed rulemaking can be found here.

The press release may be found here.

For more information, please contact Sarah Holland.