Employers with more than 50 employees have long been grappling with the complexity and costs associated with Affordable Care Act (ACA) regulations for the workplace.

Now, the U.S. Department of Labor (DOL) has released proposed revisions to the “white collar” exemptions to the Fair Labor Standards Act (FLSA), which would significantly expand the number of workers who will be eligible for overtime pay. According to DOL estimates, these long-awaited revisions would increase overtime eligibility for approximately 4.6 million employees who are currently classified as exempt.

Under its proposed rules, the DOL sets the salary threshold for white-collar exemptions at the 40^th percentile of weekly earnings for full-time salaried workers nationwide. According to data from the Bureau of Labor Statistics, that figure was $921 per week or $47,892 per year in 2013. The DOL anticipates that when its Final Rule takes effect in 2016, the salary level will rise to $970 per week or $50,440 per year.

The DOL proposes automatically updating the salary level on an annual basis and believes this will make further rulemaking on this issue unnecessary, keeping the salary level on pace with inflation.

Further changes to the specific duties tests required under the executive, administrative and professional exemptions are unnecessary, the DOL says, given the increase in the minimum salary level and its proposal for automatic annual updates. But the DOL did invite comment on revisions for these tests. By way of example, the DOL suggested that the exemptions regulations could be amended to impose a more stringent rule requiring the employee to perform exempt duties more than 50% of the time, similar to the exemption rules in California.

Prior to 2004, the FLSA’s regulations contained two different duties tests for executive, administrative and professional employees, depending on the employee’s salary level: a “long duties test” for employees who earn a lower salary and a “short duties test” for employees at a higher salary level. The long duties test included a 20% limit on time devoted to nonexempt tasks (40% for employees in the retail or service industries). In the 2004 Final Rule, the DOL replaced the differing long and short duties tests with a single standard test for executive, administrative and professional employees that did not place a limit on the amount of nonexempt work an employee can perform.

In the proposed regulations, the DOL states it is “concerned that employees in lower-level management positions may be classified as exempt and thus ineligible for overtime pay even though they are spending a significant amount of their work time performing nonexempt work.” The DOL notes “that the removal of the more protective long duties test in 2004 has exacerbated these concerns and led to inappropriate classification[s].”

It’s important to note that these proposed provisions have not yet taken effect. As of now, the exemptions rules have not changed—which means employers don’t need to take immediate action.

But you and your commercial clients should be aware of the potential impact in order to begin gauging and preparing an appropriate response that complies with the proposed revisions. Preparation is particularly important in this case because there is no employee size exemption for compliance like the ACA’s 50-employee threshold, nor is there a geographic adjustment for cost of living—the same thresholds apply to a more expensive locale like San Francisco or New York City as they do to a less expensive rural area.

Dave Evans is a certified financial planner and an IA contributor.