Newly Proposed FLSA Threshold: $55,068
By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published September 12, 2023
On August 30, 2023, the US Department of Labor released news about the long-awaited Notice of Proposed Rulemaking for the federal Fair Labor Standards Act (FLSA).
Since 2014, the FLSA salary threshold has made headline news. The Obama Administration attempted to enact comprehensive changes to the FLSA with the goal of giving more employees the chance to earn overtime pay. Those efforts were thwarted when a federal judge placed an injunction on a new $913 salary threshold just days before it was scheduled to go into effect.
A more modest FLSA salary threshold ($684 per week) was later passed and made effective in 2020. This is the same salary threshold used today.
As expected, the Department of Labor had plans to revisit the salary threshold, and those plans just became more public with the newest Notice of Proposed Rulemaking. Specifically, the Department of Labor’s proposed rule includes:
- Increasing the FLSA standard salary threshold from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year). This represents a 54.8 percent increase.
- Automatically updating the salary threshold every three years to keep pace with changes in worker salaries.
The proposed rule also restores overtime protections for US Territories and amends the highly compensated exemption test salary threshold, neither of which will apply to Illinois employers.
More information on the proposed rule can be found in the Department of Labor’s Frequently Asked Questions.
Those wishing to leave a comment on the proposed rule changes can do so now through November 7, 2023. All public comments submitted, including any personal information provided, will become a matter of public record and will be posted without change. The Department of Labor has posted instructions on how to file a public comment at regulations.gov.
Upon commencement of the commentary period, public comments will be considered, and a final rule will be drafted. Employers will be given at least 60 days to prepare for the rules’ official effective date, whenever released.
HR Source will continue to stay abreast of updates in this area and will share more information when available. In the meantime, members with questions can contact us through the HR Hotline online or at 800-448-4584.
Do you have any jobs that might be affected by an increase in the salary threshold under the FLSA proposal? Will this increase, if it goes through, have a major impact on your budget? Join the conversation in the All Members Community on HR Exchange.