DOL Expected to Revisit Overtime Salary Threshold Again

What Employers Need to Know

The Department of Labor has signaled ongoing interest in revisiting the salary threshold for overtime exemptions under the Fair Labor Standards Act. For employers, this means the question of who qualifies as exempt from overtime remains a moving target.

Current Requirements

Under the FLSA, employees must meet both a duties test and a salary threshold to be classified as exempt from overtime. The salary threshold has been subject to multiple rulemaking efforts in recent years, and employers should be prepared for potential changes.

How to Prepare

Employers should take several steps regardless of the final outcome:

• Audit current classifications: Review all exempt positions to ensure they meet both the duties test and the current salary threshold
• Budget for potential increases: If the threshold rises, some currently exempt employees may need to be reclassified or given raises
• Document job duties: Ensure job descriptions accurately reflect the actual duties performed, since the duties test is equally important
• Review state requirements: Several states have their own, higher salary thresholds that may already exceed any new federal standard

What This Means for Small Employers

Small and mid-sized employers are disproportionately affected by salary threshold changes because they are more likely to have exempt employees near the threshold. Businesses with 2-500 employees should work with their HR team or legal counsel to identify any positions that could be affected and develop a plan for compliance.

The key is not to wait for final rules. Employers who proactively audit their classifications and document their analysis are better positioned to respond quickly when changes take effect.