Department of Labor Proposes Increasing Minimum Exempt Pay Levels

The US Department of Labor (DOL) has finally proposed a new rule to update the pay thresholds necessary to satisfy certain “white collar” overtime exemption regulations after its prior rule was rejected by a federal court in 2016. On March 7, 2019, the agency announced the proposed rule, which would increase the minimum salary from $455 weekly ($23,660 annually) to $679 weekly ($35,308 annually) for workers whose duties qualify them for the executive, administrative, or professional exemptions from overtime. The agency also proposes to increase the minimum compensation to qualify for the highly-compensated employee exemption from $100,000 to $147,414 annually. While the proposed new minimum salary is less than the 2016 proposal, the new highly-compensated employee threshold is higher than the prior proposal. The agency estimates the minimum salary increase would make more than one million existing workers eligible for overtime and the increased threshold for highly-compensated employees would make another 200,000 employees eligible for overtime.