DOL Proposes Salary Increase for White Collar Overtime Exemptions

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The United States Department of Labor recently released the details of a proposal that would increase the minimum salary for overtime exemptions for white-collar executives, administrators, and professional employees.

The new proposal wants to increase the minimum annual salary for exempt status from $23,360 to $35,308. This is a significantly smaller increase than what was adopted by the Obama administration in 2016. The Obama era increase would have raised the minimum salary for exempt status to $47,476 per year. However, it was blocked by a court and never went into effect.

The bill also aims to raise the minimum annual compensation to qualify for the FLSA’s “highly compensated employee” exemption, from $100,000 to $147,414.

Special minimum compensation rates for employees in the motion picture industry are included in the bill as well. The proposed rule will also allow non-discretionary bonuses and incentive compensation to be used to satisfy up to 10% of the salary level.

The proposal doesn’t include any changes to the “duties tests” to qualify for exempt status, and it also doesn’t provide for additional automatic periodic increases to the minimum salary level. Instead, DOL will “review” the salary level every 4 years to determine whether an adjustment is necessary.

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