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On April 10, the Office of Information and Regulatory Affairs at the Office of Management and Budget concluded its review of the U.S. Department of Labor’s Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees final rule. The rule would alter overtime regulations under the Fair Labor Standards Act. The rule is expected to be released imminently now that it has completed OIRA review.  

While details of the final rule are not yet available, the DOL’s proposed rule would increase the minimum salary threshold for exemption by nearly 70%, from the current $35,568 annual salary level to $60,209 annually. The DOL also proposed to significantly raise the total annual compensation needed to qualify for exemption under the streamlined test for highly compensated employees from the current total annual compensation of $107,432 to $143,988. Finally, the DOL proposed to automatically update the standard salary level and the HCE total annual compensation threshold every three years.

On Nov. 7, 2023, ABC submitted comments to the DOL in opposition to the rulemaking. ABC also issued a press release and signed onto coalition comments criticizing the proposed rule as a steering committee member of the Partnership to Protect Workplace Opportunity.

To learn more about the rule’s proposed changes, see ABC general counsel Littler Mendelson’s analysis of the proposal. Also, see the DOL’s frequently asked questions about the proposed rule.

In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. ABC, along with several other business groups, sued the DOL in federal court and succeeded in blocking the rule from taking effect.

ABC will provide additional updates once the final rule is released.