Predictions on Salary Levels in Proposed DOL Overtime Rule

In May, the U.S. Department of Labor is expected to propose new salary thresholds for the Fair Labor Standards Act.[1] The anticipated proposed rule will update the salary thresholds for both white collar — or executive, administrative and professional, or EAP, employees — and highly compensated earners, or HCE.

An employee who earns a salary above the white collar threshold, in a position that satisfies the FLSA's duties test, is exempt from the overtime provisions of the FLSA.[2] An employee who earns total compensation above the HCE salary threshold, including a salary above the white collar threshold, is exempt from the overtime provisions of the FLSA if they perform at least one of the duties of an EAP employee.[3]

While proposed EAP and HCE salary thresholds are expected in May, their dollar values are not yet known. This article presents a range of possibilities for these salary thresholds by applying the methodologies used in recent DOL rules.

The proposed rule in May is likely to increase the EAP salary threshold by over 68% to approximately $60,000 per year and increase the HCE threshold by over 56% to about $168,000 per year. These projections are consistent with the May 2016 final rule methodology and based on publicly available data that approximates the confidential pay data that has often been used by the DOL to set FLSA salary thresholds.

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