It’s been three years since the Department of Labor (DOL) last released updates regarding the Fair Labor Standards Act (FLSA) overtime provisions. Those updates, released under the Obama administration, would have doubled the salary threshold for overtime pay from $23,660 to $47,476.
However, since that time, the proposed updates have been met with several lawsuits and injunctions, keeping the status of the updated salary threshold uncertain. For more information about those lawsuits and injunctions, click here.
Under current rules, originally established in 2004, certain nonexempt employees must receive overtime pay, at no less than one and one-half times the regular rate of pay, for hours worked over 40 hours per work week, if they fall under the salary threshold. Employees falling over the set salary threshold (currently set at $23,660 per year) are exempt from the overtime rules.
Earlier this month, an official at the DOL indicated that the department is set to announce the long-awaited update to the rule, raising the threshold to $35,308. By raising the overtime exemption threshold, the DOL expects millions of Americans to be reclassified as eligible for overtime pay.
In addition to updating the salary threshold, there is some indication that the DOL may set this threshold to update periodically. Similar to other amounts regulated by the DOL, these automatic updates would likely account for changes due to inflation.
These proposed updates are only reported, we will be sure to update this article as new information becomes available.
Please note: The salary threshold discussed above applies at the federal level. Many states, including New York and California, have set higher salary thresholds along with their own overtime rules.