Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) sets a minimum hourly wage, a 40-hour workweek, overtime rules, timekeeping requirements and other standards. The guidelines affect full-time and part-time workers in the private sector and in federal, state and local governments.

One of the tests that the U.S. Department of Labor uses to determine who is to be paid for working overtime is annual pay, commonly referred to as the FLSA salary threshold.  Some employees are excluded from the overtime pay rules because their annual pay exceeds the FLSA salary threshold.  They are considered exempt. Those who are covered are considered non-exempt and must be paid for all hours worked, including overtime if more than 40 hours are worked in the week.

The U.S. Department of Labor recently announced changes in the salary threshold.  As a result, some employees FLSA status may change from exempt to non-exempt. This section is to help employees, managers and the HR community understand FLSA transitions.

Note, FLSA regulations explicitly exclude certain employee groups from the overtime pay rules. These employee groups include, but are not limited to, teachers, physicians, and attorneys. These employee groups are not eligible for overtime pay.