New Secretary of Labor Hints at Increased Minimum Salary for Overtime Exemptions
Will the DOL again seek to raise the minimum salary level for exempt “white collar” employees?
In testimony before the House Education and Labor Committee on June 10, 2011, Secretary of Labor Marty Walsh stated that the Department of Labor (DOL) is reviewing a Final Rule issued during the Trump administration, in which the DOL increased the minimum salary required to qualify for the Executive, Professional, and Administrative exemptions – a.k.a. the “white collar” exemptions – under the FLSA. Under the Final Rule, which went into effect at the beginning of 2020, the minimum annual salary rose from $23,660 ($455 per week) to $35,568 ($684 per week). In addition, the minimum salary required to satisfy the “Highly Compensated Employee” (HCE) exemption increased from $100,000 per year to $107,432 per year.
In his testimony, Secretary Walsh asserted that the current minimum salary is “definitely too low” and that the Final Rule is under active review by the DOL. However, Walsh provided no further details, other than to add that the DOL was considering a revision to the Final Rule that would provide for regular increases to the minimum salary, a provision that was included in an Obama-era Final Rule but was not part of the current Final Rule. Notably, Walsh did not say whether the Department intended to seek a return to the salary levels set forth in the Obama-era Rule, which would have increased the minimum annual salary for the exemptions to $47,476 – double the minimum salary in effect at the time. That Rule, which also would have increased the minimum salary required for the HCE exemption to $134,004, was struck down by a federal district court in 2016, before it went into effect. During his campaign, then-candidate Biden stated that he wanted to reimplement the Obama-era salary levels. Given the legal challenges that eventually felled the Obama-era Rule, it remains to be seen whether the DOL will attempt such a large increase in the current salary.