The public comment period that opened in early Sept. 2023 on the proposed “new” overtime rule will end Nov. 7th. As part of the FLSA, overtime regulations contain specific exemptions for administrative professionals from the overtime requirement of paying time and a half for more than 40 work hours in a workweek. The scale sets a minimum salary as one of the salary exemption requirements.
This exemption allows salaried employees to be paid a fixed amount for a workweek and, no matter the number of hours worked, not be eligible for overtime. The 2023 proposed rule directly impacts employees exempt from overtime based on the “executive, administrative, or professional” exemption.
The last update to the Fair Labor Standards Act (FLSA) overtime regulations was planned in 2016 when the minimum wage increase for salaried employees was proposed and blocked at the 11th hour from becoming a reality. The proposed increase would have taken the $455 weekly minimum to approximately $990. A few years later, without much fanfare, a smaller increase was proposed and implemented, making the weekly salary minimum $684 per week for exempt employees.
An employee must receive a minimum of $684 weekly (estimated 35,464 per year) to qualify for the exemption in most parts of the U.S. (29 CFR 541.600(a)). (New York State has set its thresholds). The new proposed rule would move the administrative exemption salary requirement to $1,059 per week or $55,068 per year.
What to do? Pull out your employee’s offer letters, job descriptions, and documents detailing their essential functions and responsibilities. Make sure your employees are classed correctly – non-exempt or exempt, and plan for an upcoming change for employees with exempt duties that do not meet the minimum salary requirement.