In March 2014, President Obama issued a memorandum to the U.S. Secretary of Labor directing the Secretary to modernize and streamline the existing overtime regulations for executive, administrative, and professional employees.  The regulations, codified at 29 C.F.R. Part 541, provide the rules for the so-called “white collar” exemptions to overtime pay requirements, as well as the rules for classifying outside salespersons and computer employees.

The proposed rule was released earlier this morning.  The USDOL proposes to raise the minimum salary for exempt status under the white collar overtime exemptions from $455 per week (or $23,660 per year) to as high as $970 per week ($50,400 per year).

In addition, the USDOL proposes to raise the minimal level of total annual compensation for “highly compensated employees”—who are deemed exempt under federal law if they “customarily and regularly” perform any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee (even if such duty is not their “primary duty”)—from $100,000 to at least $122,148.

There were no proposed changes to the duties tests for exempt status, despite the anticipation that the USDOL would move from the more qualitative “primary duty” test to a quantitative, percentage-of-time-spent test.