In 2021, the U.S. Department of Labor (DoL) put the business community on notice that it intended to increase the overtime exemption threshold, which determines the salary level for when employees are eligible to time and a half based on a 40-hour workweek. In 2019, the Trump administration announced an increase in the overtime threshold from $23,660 to $35,568. Sources indicate the Biden administration could potentially raise the level to $53,000-58,000, with some outside advocacy groups calling for figures exceeding an $80,000 annual salary.
The DoL intended to release their rule in April, but that schedule may now slip into May 2022. Regulators are continuing to hold stakeholder listening sessions into April and, of more consequence, President Biden’s nominee to head DoL’s Wage and Hour Division failed to secure the votes needed in the U.S. Senate for confirmation. Undoubtedly, the Biden administration had hoped to have their nominee in place as part of any announcement of a new overtime rule. Should the Labor Department move forward in the coming months, many expect a new overtime threshold to potentially take effect on Jan. 1, 2023.