USDOL OT Rule Sets FLSA Minimum Salary Threshold at $35,308

The U.S. Department of Labor (USDOL) has issued a proposed rule raising the minimum salary threshold required for employees to qualify for Fair Labor Standards Act (FLSA) white collar exemptions from overtime pay to $35,308 (or $679 per week). The proposed threshold is about $12,000 higher than the currently enforced minimum of $23,660, and about $12,000 lower than the threshold in a 2016 rule proposed by the Obama administration but which was invalidated by a federal court judge before it could go into effect.

The new rule, which defines exemptions for executive, administrative and professional (EAP) employees, also:

  • Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level;
  • Raises the annual salary threshold for highly compensated employees (HCEs) from $100,000 to $147,414; and
  • Proposes regular increases to identified thresholds every four years following public comment (the 2016 rule proposed automatic increases every three years).

Once published in the Federal Register, the public will have 60 days to comment. The rule is expected to take effect in January 2020.

What does this mean for employers? An up-to-date review of exempt employees and their duties will be helpful in anticipation of 2020.

For more information, see the DOL website or DOL fact sheet.

Update March 22, 2019: The USDOL's proposed rule was published today in the Federal Register. The public commentary period runs through May 21, 2019.