In September, the Wage and Hour Division of the U.S. Department of Labor (DOL) published a notice of proposed rulemaking (NPRM) to revise the regulations governing the “white collar” overtime exemptions under the Fair Labor Standards Act (FLSA). This proposal would substantially increase the minimum salary threshold to qualify as exempt from the FLSA’s obligation to pay overtime for hours worked over 40 in a workweek. Specifically, the DOL proposed to set the salary level at the 35th percentile of weekly earnings for full-time salaried workers based on the lowest-wage Census region. The public comment period has closed and the DOL announced that it plans to issue the final rule in April 2024.

The current salary level, which was set in 2019, is based on the 20th percentile of full-time salaried workers in the lowest-wage region, coming out to $684 per week or $35,568 annually. The DOL reported that by using the 35th percentile the salary threshold for exemption would jump more than 50%, to $1,059 per week or $55,068 annually based on data from 2022. However, the DOL indicated that it would use the most recent data available at the time it issues the final rule, which could lead to a salary level higher than $55,068 annually.