U.S. Department of Labor Proposes New Rule to Increase Overtime Salary Threshold

On August 30, 2023, the U.S. Department of Labor issued a proposed rule that increases the salary threshold under which employees are eligible for overtime pay under federal law. Currently, employees who earn less than $35,568 per year or $684 per week must be paid overtime, or one and one-half times the employee’s regular rate of pay for all hours worked over 40 in a workweek.  Under the proposed rule, all employees who earn less than $55,000 per year or $1,059 per week must be paid overtime.

Employees who earn greater than $55,000 must also be paid overtime unless they are employed in an executive, administrative, or professional capacity, are a salesperson, or are involved in computer programming. Whether individuals employed in these capacities are exempt from overtime depends on the employee’s primary duties, which is a fact intensive inquiry.

The DOL will publish the proposed rule in the Federal Register, which then affords other federal agencies and the public 60-days to comment on the new rule. During this time, the President’s Office of Information & Regulatory Affairs may also review the proposed rule if it determines the proposed rule will have a “significant” impact on the economy or other social policies.  The DOL will then take comments from the public and other agencies into consideration before issuing a final version of the rule to Congress before it can take effect.

Individuals who believe that they have not been paid correctly or have been incorrectly classified as exempt from overtime under federal and/or State law should seek legal counsel to analyze their potential claims.