In March 2014, President Obama directed the U.S. Department of Labor (DOL) to update existing overtime regulations for so-called “white collar” employees under the federal Fair Labor Standards Act (FLSA). In response to the president’s mandate, the DOL is preparing a proposed regulation entitled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.” The proposal is expected to narrow the “white collar” exemptions and make more workers eligible for overtime pay under federal law.
Just as significantly, the proposed regulation will also increase the minimum weekly salary an employee must earn to qualify as exempt from the FLSA’s minimum wage and overtime requirements. Although it is unlikely that the DOL will unveil the formal proposal for at least a few weeks, there are credible reports that the DOL’s regulation will practically double the minimum salary for exempt employees: from slightly under $24,000 per year ($455 per week to be precise) to $42,000. Although several states’ laws already require higher weekly salaries than the FLSA’s current threshold, few jurisdictions have minimum salaries as high as the DOL’s anticipated proposal. In New York, for instance, exempt employees must earn $656.75 per week, or just over $34,000 per year.
Before they become final, the DOL's proposed regulation will be subject to a public comment period and finalization.