The Department of Labor has proposed a rule (available here) that would significantly increase the minimum salary threshold required to qualify for the FLSA’s so-called “white collar” exemptions for executive, administrative, and professional employees. The finalized rule is expected to take effect in 2016.

The current salary threshold, set in 2004, is $455 per week ($23,660 per year). DOL proposes to increase the threshold to an amount equal to the 40th percentile of earnings for full-time salaried workers.  The new threshold is projected to be $970 per week ($50,440 per year) in 2016, more than double the current threshold.

DOL estimates that the proposal would bring nearly 4.7 million currently-exempt employees within the scope of overtime protection. Critics of the proposal warn that an increased overtime threshold would result in increased business costs, a rise in the use of part-time entry-level workers, and reduced opportunities for employees reclassified as non-exempt.

Covington’s employment practice has published an alert describing the proposed rule. A copy of the alert is available here.