August 30, 2023
Today, the U.S. Department of Labor announced a proposal to increase the Fair Labor Standards Act’s (FLSA) salary-level threshold from $35,568 to $55,068, which would result in many more employees being entitled to overtime pay for hours worked in excess of 40 in a workweek. So, even if an employee is performing otherwise “exempt” duties associated with the Executive, Administrative, Professional, Outside Sales and Computer Employees exemptions, they will still be entitled to overtime for hours worked over 40 unless they are paid at least a salary of $1,059 per week.
The FLSA’s salary-level threshold was last increased in 2019, from $455 to the current $684 per week. This earlier increase reflected the 20th percentile of weekly earnings of full-time salaried employees in the lowest wage Census Region (the South) and in the retail industry nationally.
For New York employers, this increase will have no effect on their New York-based employees, because New York’s salary threshold is already higher than the proposed increase under the FLSA. As of December 21, 2022, New York’s annual salary threshold was $58,500 for New York City, Long Island and Westchester employees, and $55,341 for employees in the rest of the state. (New York’s salary-level threshold will likely increase in 2024 in line with planned minimum wage increases that will take effect on January 1.)
Connecticut and Massachusetts employers, however, would experience a significant increase in the salary-level threshold should the Department of Labor’s increase become final. Currently, the salary-level threshold in Connecticut and Massachusetts is $35,568 (or $684 per week).
The Department of Labor will consider written comments on its proposal over the next 60 days. It seems likely that the salary-level threshold will increase, although it is too soon to say whether it will increase by the proposed amount.