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DOL Seeks to Raise Overtime Exemption to $55K

August 31, 2023

The Department of Labor (DOL), which has been attempting to raise the threshold for the overtime exemption for several years, despite court and political challenges, is now proposing a rule to raise the salary threshold for overtime eligibility to $55,000.  The current salary rate threshold for overtime pay is $35,568.   There is no date set for the publication of the rule.

The proposed rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, would raise the threshold under the Fair Labor Standards Act to $1,059 per week from its current rate of $684 a week.  The DOL plans to publish the rule in the Federal Register.

The rule proposal addresses the exemption for bona fide executive, administrative and professional employees from the FLSA's minimum wage and overtime requirements. Under the carveout, employees with certain duties and who make above a certain salary are exempt from those requirements.

Previously, the DOL had anticipated proposing the rule in August, following false starts in April, May and October of 2022.  Raising the overtime pay threshold has been on the DOL’s agenda since at least 2017, and Democratic lawmakers have urged Labor Secretary Marty Walsh to raise the threshold to $82,732 by 2026, after he told Congress in 2021 that the existing rate was “definitely” too low.  Former President Barack Obama's administration finalized a rule raising the threshold to $47,476, but a Texas federal court invalidated that rule in 2017.  Both the Biden and Trump administrations have kept the existing salary threshold of $35,568.

This is an evolving development that we plan to monitor.  If you have any current questions about how the proposed salary exemption threshold might impact your organization, please contact Johnson & Bell Employment Shareholders, Christopher J. Carlos or Caroline K. Vickrey.

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