The minimum salary threshold to qualify for the executive, administrative, and professional exemptions to the Fair Labor Standards Act (FLSA) will more than double on December 1, 2016, from $23,660 per year to $47,476 per year. This is the most notable—but not the only—change to the FLSA exemption requirements under the final Part 541 regulations that the U.S. Department of Labor (DOL) released on May 18, 2016. Another noteworthy provision in the final rule automatically adjusts the required salary amount every three years beginning on January 1, 2020.

This article analyzes the final regulations and compares them to what the DOL’s Wage and Hour Division (WHD) had proposed. Although the final regulations do offer a few silver linings for employers, they still will create a storm of controversy because their implementation will impose significant costs and challenges, particularly in certain market sectors and geographic regions.