New overtime rule nearing publication

The Department of Labor’s (DOL) overtime rule—Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees—proposed last Fall, is nearing the final stages of review and is likely to be issued by April 2024.

OIRA completing final review of regulation

On March 1, 2024, the draft regulation was sent to the Office of Information and Regulatory Affairs (OIRA) for a last check and effort to respond to the over 15,000 comments that were submitted during the lengthy comment period. OIRA review is usually the last step before issuance of a final rule.

The proposed overtime rule focuses on the “salary basis test” and would increase the standard salary level requirement for executive, administrative, professional, and computer employees from $684 to $1,059 per week ($55,068 annually); increase the annual salary threshold requirement for highly compensated employees from $107,432 to $143,988; and automatically raise these salary thresholds every three years based on current earnings data. It’s estimated that the ultimate threshold for overtime will approach $60,000 a year for a nonexempt employee.

It’s unknown whether or to what degree the DOL made any modifications to its proposal to address the comments it received. If the final rule follows the approach DOL originally proposed, it will significantly change how the Fair Labor Standards Act’s (FLSA) minimum wage and overtime exemptions operate.

Enormous impact