Yesterday the U.S. Department of Labor announced a proposed rule to raise the minimum salary threshold tied to certain FLSA exemptions. Under the proposed rule the minimum salary to be exempt from overtime under the Executive, Administrative and Professional exemptions to the FLSA would increase to $1,059 per week, or $55,068 per year. The current rate is $684 per week, or $35,568 a year.
The proposed new salary threshold is tied to the 35th percentile of weekly earnings of full-time salaried workers in the Southern U.S. Under the proposed rule the minimum salary threshold would automatically update every three years based on the then current earnings data.
The proposed rule would also raise the minimum salary threshold for the highly compensated employee exemption to $143,988 annually. The current threshold is $107,432 annually.
According to the DOL the proposed rule would extend overtime protections to 3.6 million workers.
The next step in the process is for the DOL to publish the proposed rule in the Federal Register. But this is almost certainly headed for litigation, as was the case with the proposed overtime increase under the Obama administration. That proposed rule , which would have increased the minimum salary for the Executive, Administrative and Professional exemptions to $47,476 annually, was invalidated by a Texas court. That lead to a compromise with the current annual amount of $35,568.
Stay tuned!
Tennessee Employment Law 