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The U.S. Department of Labor Proposes FLSA Changes to Give Millions of Workers Overtime Pay Protection

Client Alert
September 18, 2023

On August 30th, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking (NPRM) proposing new regulations to guarantee overtime pay protection for millions of employees. Specifically, the NPRM proposes to change the federal Fair Labor Standards Act (FLSA) regulations with the following:

  • Increase the salary threshold for bona fide executive, administrative, and professional (EAP) employees from $35,668 annually to $55,068,
  • Increase the salary threshold for highly compensated employees (HCE) from $107,432 annually to $143,988,
  • Apply these salary changes to U.S. territories and to employees in the motion picture industry, and
  • Automatically update these earning thresholds every three years with current wage data.

The FLSA establishes minimum wage and overtime pay for employees in the private sector and in federal, state, and local governments. Non-exempt workers are guaranteed a federal minimum wage of $7.25 per hour and overtime pay of not less than one and one-half times their regular pay rate after 40 hours of work in a week.

Current FLSA regulations provide that EAP employees who earn a salary of $35,668 annually and perform duties within the EAP description (e.g., management, directing the work of others, performance of work requiring advanced knowledge, etc.) are exempt from FLSA protection. Similarly, current FLSA regulations exempt HCEs who earn a salary of $107,432.

EAP regulations were last updated in 2019. The DOL noted that keeping the earnings threshold up to date would benefit both workers and employers. Further, the DOL hopes FLSA thresholds reflect current economic conditions. In the first year, the DOL has estimated that 3.4 million workers exempt under current regulations will become newly entitled to overtime protection if the NPRM goes into effect.

The NPRM will be open for public comment for 60 days to consider comments before issuing a final rule. While it is uncertain when the NPRM could be finalized or whether it would be upheld by courts, employers should start to prepare for its potential issuance by re-considering exemptions in their current workforce.

Should you have any questions concerning the NPRM, please contact BMD Member John Childs at jnchilds@bmdllc.com or BMD Labor & Employment Partner and Co-Chair of its Labor & Employment Division, Bryan Meek, at bmeek@bmdllc.com.

DOLU.S. Department of LaborovertimeJohn ChildsBryan Meek
Client Alert

The Ohio Board of Pharmacy’s Latest Batch of Rules: What Providers Should Know

January 15, 2024The Ohio Board of Pharmacy released several new rules and proposed amendments to existing rules over the past month that will significantly impact pharmacy operations. Topics range from updates to the Terminal Distributor of Dangerous Drugs license to mobile clinics to mandatory rest breaks for pharmacists of outpatient pharmacies. A summary of the proposed changes is below, along with instructions for commenting on the rules. Your BMD healthcare attorney can help write comment letters and submit the comments on your behalf as well.Client Alert

Employee or Independent Contractor? New Guidance Issued by the Department of Labor

January 10, 2024On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA). The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.Client Alert

Increased Medicaid Rates to Take Effect This Month for Ohio Providers

January 5, 2024As required by House Bill 33, Ohio’s 2024-2025 operating budget bill, reimbursement rates paid by the Ohio Department of Medicaid will increase for a wide range of providers starting on January 1, 2024.Client Alert

Corporate Transparency Act Update

December 27, 2023The Corporate Transparency Act (“CTA”), with an effective date of January 1, 2024, is set to impose strict reporting guidelines on business owners throughout the country. The following provides a brief update on two aspects of the CTA ahead of its effectiveness next week.Client Alert

The Second Wave of UnitedHealthcare's Prior Authorization Cuts Started in November

December 11, 2023In August 2023, UnitedHealthcare released its plan to eliminate roughly one-fifth of its then-current prior authorization requirements. The first round of prior authorization cuts took effect on September 1, 2023. In that round, UnitedHealthcare eliminated the necessity for some prior authorizations for UnitedHealthcare Medicare Advantage, UnitedHealthcare commercial, UnitedHealthcare Oxford and UnitedHealthcare Individual Exchange plan members. The second and final round of prior authorization cuts began on November 1, 2023. The November 2023 Prior Authorization Cuts apply to the same plans as well as community plans (i.e., Medicaid managed care plans).
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