DATE | STANDARD SALARY LEVEL |
---|---|
Before July 1, 2024 | $684 per week (equivalent to $35,568 per year) |
July 1, 2024 | $844 per week (equivalent to $43,888 per year) |
January 1, 2025 | $1,128 per week (equivalent to $58,656 per year) |
July 1, 2027, and every 3 years thereafter | To be determined |
To be exempt, an employee must meet ALL of the standards in the following “tests” outlined by FLSA:
1. be paid over a minimum salary threshold established by the FLSA – the “salary level test” – AND
2. be paid on a salary basis as opposed to an hourly basis – the “salary basis test” – AND
3. perform certain duties as outlined in one of the “duties tests.”
Starting from July 1, 2024, the Fair Labor Standards Act (FLSA) salary level test requires that an employee's salary must meet or exceed $43,888 annually or $844 per week for exemption from overtime provisions. Effective January 1, 2025, the Department of Labor will implement a new salary threshold of $1,128 per week (equivalent to $58,656 annually). Employees earning less than these thresholds will transition to non-exempt status unless exempted based on their duties, such as a primary duty involving teaching or instruction. It's important to note that exemption status is not solely determined by salary; it's one of three criteria and all three criteria must be met for a position to be exempt.
Additionally, based on recent announcement by the Department of Labor, salary levels will undergo automatic updates every three years.
To be exempt, an employee must qualify under one or more of the following tests:
Each duties test has specific requirements that must be met for an employee to be exempt. For example, the Executive Exemption requires that an employee a) supervise two or more full time employees (or their FTE equivalent), b) have authority to hire and fire, or meaningfully recommend hiring and firing, and c) manage a recognized department or subdivision. More information on the exemption tests is available on the Department of Labor website.
Yes. flex time or schedule changes can be used in lieu of overtime for non-exempt employees. Supervisors have the discretion to require non-exempt employees to utilize flex time or schedule change, which involves taking time off within the same work week to compensate for any hours worked in excess of their regularly scheduled workday. Flex time is typically accrued at a rate of one hour for each hour worked beyond the regular schedule. The primary objective of flex time is to prevent employees from exceeding 37.50 hours in a workweek and thereby avoid the payment of overtime wages.
For example: An employee's regular work schedule is from 8:15 AM to 4:30 PM, Monday through Friday, totaling 37.5 hours per week. On Monday, due to unexpected workload, the employee stays an extra hour and works until 5:30 PM. This means the employee accrues one hour of flex time for this extra hour worked. Later in the same work week, the employee can be asked to come in an hour later or leave an hour earlier.