This morning the Department of Labor announced that it is seeking to increase the number of employees eligible for overtime pay by increasing the minimum salary required if an employee is to be considered exempt under the administrative, executive and professional exemptions.  The proposed increase would take the minimum annualized salary from $23,660 to $50,440.  In addition, under the proposed rule the threshold for the FLSA’s Highly Compensated Employee exemption would rise from $100,000 to $122,148.  Both the minimum salary and the Highly Compensated Employee threshold would be indexed for inflation. The DOL also suggested that it may seek other changes to limit the available overtime exemptions.  If this change becomes a final rule, we would expect it to become effective in 2016.

Note that even if employees meet the higher minimum salary requirement, they still must meet the other requirements for exempt status — being paid on a salary basis and satisfying one of the duties tests — to qualify as exempt from overtime requirements.

No action is necessary at the moment as the proposed rule is not final.  We will keep you updated on future developments.