As of January 1, 2020, the FLSA salary threshold is $36,568 per year (or $684 per week). The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; The advanced knowledge must be in a field of science or learning; and. Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances establishing a higher minimum wage or lower maximum workweek than those established under the FLSA. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. Highly compensated employees may be exempt if they perform office or non-manual work and earn an annual salary of $107,432 or higher. The following is an example from the regulations: While the final rule is mostly consistent with the proposed rule, the USDOL made two significant revisions: Here is a link to the USDOL website with the 245-page final rule (including discussion of comments received), fact sheets, and FAQs. The table below outlines the revised salary thresholds in New York State: For Nassau, Suffolk, and Westchester Counties, the salary threshold will increase to $1,125.00 per week ($58,500.00 annually) on December 31, 2021. Instead, the Department simply affirmed its intent to update its EAP regulations more regularly, but without the promise of quadrennial updating. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. An official website of the United States government. To be considered "exempt," these employees must generally satisfy three tests: Salary-level test. An underpublicized feature of the new federal rule is that it formally rescinds the 2016 final rule that, although enjoined, has remained a part of the official rules published by USDOL. Check out what FLSA laws say about exempt employees and what you can require of them. Exempt employees must be paid on a salary basis and must have exempt job duties. #block-googletagmanagerfooter .field { padding-bottom:0 !important; } Although you must be careful, as exemption status is based on the duties of the position and not these specific job titles. Under the FLSA regulations, there is a minimum threshold for weekly salary wages. Please see this page for more details about the changes to the required minimum salary. What salary must I have to remain exempt? Equally important, employers must also ensure that their exempt salaried employees are properly paid a salary as defined by the Fair Labor Standards Act (FLSA). The new salary rule adjusts the minimum salary for an exempt employee from $466 per week to $684 per week. .dol-alert-status-error .alert-status-container {display:inline;font-size:1.4em;color:#e31c3d;} Attorney Advertising. The core concern of salary reductions involves the FLSA’s “salary basis” test. .manual-search ul.usa-list li {max-width:100%;} In order to qualify as an exempt employee, the employee in question must meet three criteria: (1) the employee must make at least $35,568 per year, (2) the employee must be paid on a salary basis, and (3) the employee must perform exempt job duties, as defined by the FLSA. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies. Effective January 1, 2020, the California threshold for employers of 26 or more employees will increase to $54,080 per year (or $1,040 per week). Whether the employer offers overtime to exempt employees is completely up to their own independent judgement. Some states may have a higher starting pay per week to qualify a person as an exempt salaried employee, but it cannot be less than the federal minimum which is $47,476 per year. Although possible, it appears unlikely this rule will be blocked by Congressional action or by litigation (although litigation by worker advocates has been threatened). The FLSA recordkeeping regulations do not require that the same workweek be adopted for both non-exempt and exempt employees. .manual-search-block #edit-actions--2 {order:2;} For additional information, visit our Wage and Hour Division Website: http://www.wagehour.dol.gov and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243). In the United States, an exempt employee is an employee that is granted an exemption to both the minimum wage and overtime pay laws of the FLSA because they are either 1) a bona fide executive, 2) an administrative, 3) a professional, 4) an outside sales, and/or 5) a qualified computer employee. This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations. Per FLSA law, this salary is not annualized for part-time employees. Before sharing sensitive information, make sure you’re on a federal government site. Prior results do not guarantee a similar outcome. The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and. Employers must take care to ensure that employees designated as exempt salary are indeed performing exempt duties and are not misclassified. div > div.guidance-search > div.csv-feed.views-data-export-feed {display:none;} CAUTION - Before you proceed, please note: By clicking “accept” you agree that our review of the information contained in your e-mail and any attachments will not create an attorney-client relationship, and will not prevent any lawyer in our firm from representing a party in any matter where that information is relevant, even if you submitted the information in good faith to retain us. The prior salary limit was at least $455/week. This fact sheet provides general information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations, 29 C.F.R. exempt employee salary deductions The Fair Labor Standards Act (FLSA) requires that most covered employees receive overtime pay at time and one-half their regular rate of pay for all hours worked in excess of 40 per week. $780 per … *Note: The Department of Labor revised the regulations located at 29 C.F.R. An agency within the U.S. Department of Labor, 200 Constitution Ave NW @media (max-width: 992px){.usa-js-mobile-nav--active, .usa-mobile_nav-active {overflow: auto!important;}} /*-->*/. .usa-footer .grid-container {padding-left: 30px!important;} To qualify for the executive employee exemption, all of the following tests must be met: To qualify for the administrative employee exemption, all of the following tests must be met: To qualify for the learned professional employee exemption, all of the following tests must be met: To qualify for the creative professional employee exemption, all of the following tests must be met: To qualify for the computer employee exemption, the following tests must be met: To qualify for the outside sales employee exemption, all of the following tests must be met: Highly compensated employees performing office or non-manual work and paid total annual compensation of $107,432 or more (which must include at least $684* per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption. The FLSA's minimum salary requirement is set to remain the same in 2021. To pay a non-exempt employee a salary, the employer pays the employee the fixed amount per week and pays overtime at a rate of 1.5x the employee’s regular rate. For example, an exempt employee may be paid the minimum required salary plus additional compensation for working beyond … Under the FLSA’s white-collar exemptions, one of the requirements to be exempt from overtime pay is that the employee must be … Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Employees must earn the salary threshold set by the FLSA to be exempt. The FLSA does allow employers to reduce the salary of a non-exempt employee for missed work time. Effective January 1, 2020, the New York threshold for executive and administrative exempts currently ranges from $885 to $1,125 per week ($46,020 annually to $58,500 annually) depending on siz… These requirements are outlined in the FLSA Regulations (promulgated by the U.S. Department of Labor). A combination of the aforementioned duties, the performance of which requires the same level of skills. The Salary Basis Test and the Fair Labor Standards Act. The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684. Today, as anticipated, the U.S. Department of Labor (USDOL) published its final rule raising the Fair Labor Standards Act (FLSA) salary threshold for the executive, administrative, and professional (EAP) exemptions to $35,568 per year, or $684 per week, effective January 1, 2020. The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations. Employers need to check their state law before relying solely on the FLSA HCE exemption. div#block-eoguidanceviewheader .dol-alerts p {padding: 0;margin: 0;} Part 541. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Components of the New FLSA Salary Level Rule In announcing the new rule, the DOL noted the following key components: p.usa-alert__text {margin-bottom:0!important;} Payment on a salary basis on its own does not render the employee exempt from the overtime requirements of the FLSA. Other Laws & Collective Bargaining Agreements. In addition to raising the minimum salary threshold, the new rule allows employers to use nondiscretionary bonuses and/or incentive payments to make up part of an employee’s salary—up to 10%. This means that the minimum salary for exempt employees in 2021 is either: $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of 25 or fewer people, or $4,853.34 per month (or $58,240.00 annually) if the employee works for an employer of more than 25 people.⁠ 16 The exemptions do not apply to manual laborers or other “blue-collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. Most employees must meet all three "tests" to be exempt. The .gov means it’s official. As an exempt salaried employee, he or she must make at least $913 weekly. Indeed, there are many ways to compensate non-exempt employees in compliance with the FLSA, as long as the employee receives (1) the minimum wage for all hours worked and (2) the overtime premium, which is due on almost all wages. The United States Department of Labor has provided guidelines for exemption in the FLSA Regulations. All employees are eligible for overtime pay unless they meet all three of these criteria: They are salaried, not hourly, employees. [CDATA[/* >