Today, the Department of Labor finalized its regulation entitled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees covering exemptions from the Fair Labor Standard Act’s (FLSA’s) minimum wage and overtime regulations.
The final rule increases the standard salary level as well as the highly compensated employee (HCE) total annual compensation threshold. The standard salary level and HCE total annual compensation threshold will each increase on a schedule through 2027, when DOL will recalculate both standards. The scheduled increases are as follows.
DOL is not making any changes to existing job duties requirements, changes special salary levels in the territories, or adjustments to the 10% limit on commissions that can be included in the threshold. DOL estimates that 3.6 million additional workers will fall under the FLSA’s overtime requirements.
With the first changes scheduled for July of this year, employers will need to move quickly to assess the classification status of their workers. As with previous attempts to expand overtime requirements, we can expect this regulation to face a legal challenge before it is implemented.
Contact NCA President & CEO Joe Trauger at [email protected] if you have any questions or comments.