In-Depth Analysis

"The U.S. Department of Labor's Proposed Overtime Changes: Employee Salary and Classification Considerations"

Under a new proposed rule from the U.S. Department of Labor (“DOL”), millions more workers would be eligible for overtime pay unless employers pay a much higher salary threshold. As it stands, under the Fair Labor Standards Act (“FLSA”), employees who are paid a salary of at least $35,568 annually and work in a “bona fide executive, administrative, or professional capacity” — often called “white collar” or “EAP exceptions” — are not covered by the FLSA requirements for employees to receive overtime at a rate of one-and-one-half times their regular rate of pay for time worked beyond 40 hours in a week. If adopted, the new proposed rule — which would be updated every three years — would raise the annual salary level threshold to over $55,000 for white collar exemptions, and to $143,988 from $107,432 for “highly compensated” employees. 

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