Minimum Salary for Most Exempt Employees is Going Up, Up, Up

July 2, 2015

The U.S. Department of Labor has announced proposed rule making to increase the minimum salary requirement for most workers to be exempt from the FLSA's overtime pay requirements. Current regulations require a minimum salary of $455/week ($23,660/year) for most exempt employees. Under the newly proposed rules, the minimum salary for most employees to be exempt from overtime would increase to $970/week ($50,440/year). Although the proposed regulations will be open for public comment , given the push from the White House the "proposed" rule will likely be adopted by the DOL (a link to the DOL webpage with the final rule is here). Once the new rule is passed, employers who are subject to the FLSA and fail to keep up with the new minimum salary requirement will lose the exemption and have to pay overtime to many executive, administrative, and professional employees. Potentially impacted employers should review their employee classifications and pay structures, and consult with their counsel, to plan for this major change.

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