DOL’s Salary Increase Rule Explained

Update: On 5/22/24, business groups filed a lawsuit against the Department of Labor seeking to halt this increase from taking effect. The lawsuit is Plano Chamber of Commerce et al v US Department of Labor, 4:24-cv-00468-SDJ, ED Texas. I've made a video and will post updates as it gets closer to the current 7/1/24 effective date of the first phase of increase.

"What's going on with salaries getting raised?" In this week's video, I break down the US Department of Labor's (DOL) rule to increase salaries for many exempt workers in two phases: July 1 and January 1. I break down who it applies to (and doesn't), and what to expect next, including hints from the Supreme Court on how they might rule on inevitable legal challenges.

Timestamps
0:30 - Why overtime is due at all
0:48 - What "exempt" from overtime means
1:07 - Why the Department of Labor puts out these rules
1:25 - What jobs are exempt
1:40 - "Professional" exemption
2:14 - "Administrative" exemption
2:26 - "Outside sales" exemption
3:11 - "Executive" exemption
3:23 - Salary level tests
3:43 - Current minimum salary in the US
3:53 - Why teachers, doctors, lawyers and outside sales are different
4:56 - What the new DOL rule is all about
5:26 - What happened in court in 2016 that could happen again in 2024
6:04 - What would change in the new rule
6:25 - The "Highly Compensated" Exception
7:43 - A Supreme Court dissent that could come into play
7:54 - Why your pay might not go up
8:32 - When I think we'll know if it takes effect (late June)
8:55 - The legal arguments (and that dissent)

[managermethod]

Update (June 27, 2024): The Plano Chamber of Commerce and State of Texas lawsuits have been combined, and Judge Sean Jordan granted a preliminary injunction for the State of Texas (the government as an employer, not all businesses in Texas). He did not grant a nationwide injunction, nor did he award any injunction for the Plano Chamber of Commerce (and many other business plaintiffs) because they didn’t sufficiently move for a preliminary injunction.
The salary increase is scheduled to take effect July 1, but one case (Flint Avenue LLC) still seeks a nationwide preliminary injunction. If you see an update on that case before I do, please feel free to add it here!

[cimonecummings]

What if my job does not abide by this law?

[tonycalitri]

The current salary level of $35, 568 a year works out to $17.10 per hour for a 40 hour week. This is slightly above the planned minimum wage in some states. At 50 hours a week, the same salary level of $35, 568 a year falls to $13.68 an hour. It is regrettable that the Fair Labor Standards Act of 1938 did not have an inflation clause built in, and corporate America takes full advantage of that.

[kaprem]

Very imformative breakdown - thank you!

[devinstoddart]

Im a commissioned pest control worker in alabama. Which is considered outside sales and makes us exempt. Are we covered by this new dol update?