Federal Government Proposes Raising Overtime Threshold to $55K

2 Min Read By Pooja S. Nair

On August 30, 2023, the Department of Labor (“DOL”) issued a notice of proposed rulemaking for a rule “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. If enacted, the rule would guarantee overtime pay for salaried workers earning less than $55,068 a year.

The rule would raise the minimum salary required to invoke the “white-collar” exemption to overtime from the current $684/week ($35,568 annual salary) to $1,059/week ($55,068 annual salary).  Additionally, the highly compensated employee threshold would go up to $143,988 a year.

DOL estimates that this change would impact 3.6 million employees, and create an additional $1.2 billion paid to employees. 

Some states already have a higher threshold for overtime. For example, salaried workers in California are only eligible to be exempted for overtime if they are paid up to $64,480 (twice the state minimum wage).  However, with the federal minimum…