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The U.S. Department of Labor (DOL) announced on March 7 that it will be proposing an update to the salary thresholds for the exemptions to the Fair Labor Standards Act (FLSA)’s overtime pay requirements.

Under current law, an employee with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. According to the announcement, the DOL proposed rule would increase the standard salary level to $679 per week, or $35,308 per year. Above that salary level, eligibility for overtime would vary based on job duties. The proposal makes no changes to existing rules related to job duties.

The notice of proposed rulemaking also increases the total annual compensation requirement for a “highly compensated employee” from $100,000 to $147,414 per year. Employers may use nondiscretionary bonuses and incentive payments, including commissions, to satisfy up to 10 percent of the standard salary level.

The proposal also includes a commitment by DOL to periodically review the salary threshold for updating. Any updates would continue to require a notice-and-comment rulemaking process.

In June 2017, DOL solicited input on the development of overtime regulations in the wake of a federal court ruling that halted enforcement of the Obama administration’s 2016 changes. NACUBO, along with several other higher education associations, joined recommendations submitted by CUPA-HR.

Additional information, including a fact sheet, an FAQ related to the proposal, and other online resources are available on the DOL overtime webpageOnce the rule is published in the Federal Register the week of March 11, there will be 60 days to submit comments to DOL.


Mary Bachinger

Director, Tax Policy


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