Corporate > AG Deal Diary > Proposed DOL Rule Seeks to Require the Provision of Overtime Pay to Millions of Additional Employees
02 Jul '15

The Department of Labor (DOL) has announced a proposed rule that would amend the executive, administrative and professional exemptions under the Fair Labor Standards Act (FLSA). The exemptions exclude workers in such positions from the minimum-wage and overtime-pay requirements of the FLSA.

The DOL estimates that, in the first year of the proposed rule, approximately 4.6 million workers that are now exempt under current regulations would become entitled to overtime payments under the FLSA. Under the current salary test, employees qualify for the above exemptions only if they receive a salary that exceeds $455 a week (equivalent to $23,660 for a full-year worker), in addition to meeting other requirements related to their job duties. Under the proposed rule, the minimum salary threshold would increase to $921 per week (equivalent to $47,892 annually and equal to the 40th percentile of earnings for full-time salaried workers) and would be automatically adjusted via a to-be-determined formula. Additionally, the DOL’s proposed rule seeks to adjust the highly compensated employee (HCE) annual compensation level from $100,000 to $122,148 annually, or equal to the 90th percentile of earnings for full-time salaried workers (so-called HCEs must also perform certain job duties, though the requirements are less stringent than for non-HCEs).

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