Tips to Prepare for Possible Overtime Changes

A proposed rule by the U.S. Department of Labor (DOL) seeks to raise the current salary threshold for 

overtime exemptions from $35,568 to $55,068 annually. Should the change be enacted, the move will 

mark a 55% increase in the annual earnings threshold, extending guaranteed overtime pay to 

around 3.6 million salaried workers, including those in the commercial glass, glazing and metal industries.

Should the overtime change be enacted, the move will mark a 55% increase in the annual 

earnings threshold, extending guaranteed overtime pay to around 3.6 million salaried workers.

As a result, all employees earning less than $1,059 per week would be entitled to overtime pay, 

regardless of job title and duties.

The overtime changes coincide with an update to the Davis-Bacon Act, which seeks to raise 

wages for construction and subcontractor workers, including glaziers. While controversial, 

some companies welcomed the news, including Giroux Glass. CEO and president Nataline Lomedico said the 

update “further emphasizes the importance of fair compensation and quality workmanship.”

A Win for Workers

According to law firm Burr & Forman, DOL’s proposed rule raises the salary threshold to the 35th 

percentile of average weekly earnings of full-time salaried workers in the southern U.S. Census Region, 

which currently marks the lowest for wages. The rule would also change exemptions by raising the maximum 

salary for those classified as “highly compensated employees” from $107,432 to $143,988—the latter of 

which marks the 85th percentile of full-time salaried workers nationally.

“By better identifying which employees are executive, administrative or professional employees 

who should be overtime exempt, the proposed rule will better ensure that those who are not exempt 

will gain more time with their families or receive additional compensation when working more 

than 40 hours a week,” suggest DOL officials.

Federal overtime provisions are part of the Fair Labor Standards Act. The Act requires employees to 

receive overtime pay for hours worked over 40 in a workweek “at a rate not less than time 

and one-half their regular rates of pay.” According to the Act, there is no limit on the number 

of hours employees aged 16 and older may work in any given work week.

Officials say a salary level test has been part of the regulations process since 1938 and 

“has been long recognized that the best single test of the employer’s good faith

 in attributing to the employee’s services is the amount they pay for those services.”

Some salaried employees work alongside those earning hourly wages, often contributing 

more than 40 hours a week, say officials. They add that “outdated and out-of-sync rules”

 prevent those same salaried workers from earning overtime pay. They suggested that the 

proposed salary level would help ensure that salaried workers receive overtime protections 

traditionally provided by the department’s rules.

How Legal Experts Say You Should Prepare

Legal challenges to the DOL’s proposed rule are expected. A similar proposal from the Obama 

Administration, seeking to raise the annual salary threshold from $23,660 to $47,476, was blocked 

by a federal court in Texas. Nonetheless, with a final rule months away, “employers should 

review their current pay practices to prepare for possible changes,” advise experts at Burr & Forman.

Key suggestions include:

Review current position classifications and pay scales to determine how many currently exempt employees 

earn between the $35,568 and $55,068 thresholds to estimate the potential cost of increasing their pay;

For exempt positions earning below the $55,068 annual threshold, track and analyze the number of hours 

worked per week to establish the potential cost of converting them to non-exempt, hourly workers;

Be aware that many employees view salaries as a more prestigious form of pay than hourly wages and may 

view a change to hourly as a demotion. Formerly salaried employees may also resent clocking in and 

out to track hours; and

Ensure company policies are current, especially those related to proper timekeeping, approval of overtime, 

use of company equipment or personal devices to conduct business during non-work hours, meal and rest 

breaks, and remote work.

A 60-day comment period closes at 11:59 p.m. (ET) on Nov. 7, 2023. Comments can be filed electronically 

through the Federal eRulemaking Portal, or mailed to the Division of Regulations, Legislation and Interpretation, 

Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, D.C., 20210.

Comments should be identified by Regulatory Information Number (RIN) 1235–AA39.