On August 30, 2023, the U.S. Department of Labor (“DOL”) published a notice of proposed rulemaking (NRPM), announcing its plans to significantly expand the number of executive, administrative, and professional employees eligible for overtime pay under the Fair Labor Standards Act (“FLSA”).
In its proposal, the DOL estimates that, in year 1, roughly 3.6 million workers, exempt from overtime pay under the current regulations, would become newly entitled to overtime protection absent some intervening action by their employers. The change would have the biggest impact on retail, food, hospitality, manufacturing, and other industries where many “white collar” salaried workers would lose exempt status. The DOL also estimates that the updated regulations would impose $1.2 billion of direct costs on employers.
Overview of the Executive, Administrative, and Professional Employees Overtime Exemption
Unless specifically exempted under the FLSA, U.S. hourly workers are entitled to be paid no less than time-and-half their regular hourly rates for all hours worked in excess of 40 hours a week. The additional income is called “overtime pay.”
Executive, administrative, and professional workers are exempt from that overtime pay requirement provided they satisfy all three of the following tests: Continue reading
