The U.S. Department of Labor is expected to release new proposed regulations soon that will re-define the FLSA’s salary basis requirements and make millions of previously exempt employees eligible for overtime.
Last year, President Obama issued a presidential memorandum directing the DOL to update the salary basis requirements to make more employees eligible for overtime. According to CNN, the DOL is expected to release the new proposed rules sometime between now and April. The expectation is that the DOL will increase the minimum salary basis requirements for many FLSA exemptions from $455 per week (or $23,660 per year) to somewhere between $42,000 and $52,000 per year. Depending on how high the minimum salary requirement is raised, it is estimated that an additional 3.5 million to 6.1 million employees will become non-exempt and eligible for overtime once the new regulations take effect.
Takeaway: Employers with exempt employees earning salaries between $23,000 per year and $52,000 per year should start giving thought to how they will respond when the DOL’s new salary basis regulations take effect. In general, affected employees will either need to receive a raise to satisfy the new salary requirements, or they will need to start receiving time-and-a-half pay for overtime.