Washington, DC 20210 Washington state and Pennsylvania are currently considering salary thresholds in excess of the federal FLSA salary threshold for 2020. 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. 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. 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 new salary rule adjusts the minimum salary for an exempt employee from $466 per week to $684 per week. The new rule changes the current salary level for exempt employees from $23,660 per year to $35,568 annually. 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. Employers should also be aware that some state minimum wage laws lack an FLSA-identical HCE exemption; so, as a practical effect, the HCE exemption may be unavailable in certain state. To be exempt, an employee usually has to make at least $455 per week (or $23,600 a year), be salaried, and be assigned exempt job responsibilities. What salary must I have to remain exempt? .table thead th {background-color:#f1f1f1;color:#222;} Prior results do not guarantee a similar outcome. Links to your state labor department can be found at /agencies/whd/contact/local-offices. 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. The U.S. Department of Labor (DOL) considered input from public comment and held listening sessions during 2018 as part of the review process. With few exceptions, to be exempt an employee must (a) be paid at least $23,600 per year ($455 per week), and (b) be paid on a salary basis, and also (c) perform exempt job duties. Per FLSA law, this salary is not annualized for part-time employees. 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 following is an example from the regulations: Consequently, employers currently paying EAP-exempt employees less than $35,568 per year need to increase their salary levels or convert positions to non-exempt status for 2020. The exemptions also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work. The new threshold effective January 1, 2020 will be $107,432 annually (not the proposed $147,000). 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). The regular rate in this method is determined by dividing the salary by the number of hours the salary is intended to compensate. Employers must take care to ensure that employees designated as exempt salary are indeed performing exempt duties and are not misclassified. First, USDOL revised its methodology for adjusting the highly compensated employee (HCE) total annual compensation requirement. 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. Instead, the Department simply affirmed its intent to update its EAP regulations more regularly, but without the promise of quadrennial updating. ol{list-style-type: decimal;} For 2020, employees must earn a minimum or … .agency-blurb-container .agency_blurb.background--light { padding: 0; } Most employees must meet all three "tests" to be exempt. The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. Attorney Advertising. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. As of January 1, 2020, the FLSA salary threshold is $36,568 per year (or $684 per week). Exempt employees are not entitled to overtime pay, according to the FLSA federal law.This means that if the employee works more than a 40-hour workweek, their employer does not need to pay them any overtime pay. 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. The increased FLSA threshold will not have much impact in certain states; for example, California, New York, and Alaska already have higher state salary threshold requirements. Please see this page for more details about the changes to the required minimum salary. As an exempt salaried employee, he or she must make at least $913 weekly. #block-opa-theme-content > div > div.guidance-search > div.csv-feed.views-data-export-feed {display:none;} The minimum salary threshold of the FLSA changes every year, so it’s important to stay current on the regulations for proper employee compensation. However, some state laws prohibit this practice. An agency within the U.S. Department of Labor, 200 Constitution Ave NW 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 … 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 final rule is available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and. FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt under the Part 541 regulations no matter how highly paid they might be. A salary basis means that the employee receives a predetermined salary regardless of the number of hours they work. Job titles do not determine exempt status. Thus, by October 3, 2021, any employee classified as exempt under a white-collar exemption that has a minimum salary requirement who earns less than that amount will need to receive a salary increase to at least meet this amount or be reclassified as non-exempt (and made eligible for overtime pay) going forward. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. 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 size and location. Before sharing sensitive information, make sure you’re on a federal government site. Their salary is greater than $684 per week or $35,568 per year. For example, an exempt employee may be paid the minimum required salary plus additional compensation for working beyond … The new rule will be effective Jan. 1, 2020. The FLSA does allow employers to reduce the salary of a non-exempt employee for missed work time. Employees can also be exempt if they make over $100,000 a year (at least $455 a week as a salary) and regularly meet the criteria in one of the other exemption tests. 1-866-487-9243, Administrator Interpretations, Opinion and Ruling Letters, Resources for State and Local Governments, Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA), https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and, Severe Storm and Flood Recovery Assistance. Any exempt employee who currently earns a weekly salary that is less than $684 per week will be impacted by this new rule. The formal repeal brings certainty and clarity as to what rule is enforceable. Similarly, employers may, on their own initiative or under a collective bargaining agreement, provide a higher wage, shorter workweek, or higher overtime premium than provided under the FLSA. FLSA Minimum Wage: The federal minimum wage is $7.25 per hour effective July 24, 2009. 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. Teaching positions are exempt under a different FLSA provision and are not subject to the salary threshold. While collective bargaining agreements cannot waive or reduce FLSA protections, nothing in the FLSA or the Part 541 regulation relieves employers from their contractual obligations under such bargaining agreements. An employer may provide an exempt employee with additional compensation without violating the salary basis requirement if the employment arrangement also includes a guarantee of at least the minimum required salary of $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. 1-866-4-US-WAGE #block-googletagmanagerheader .field { padding-bottom:0 !important; } The FLSA's minimum salary requirement is set to remain the same in 2021. Employers and employees alike commonly assume that “salary = exempt” and “non-exempt = hourly,” but both assumptions are incorrect. 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. Part 541. This is an increase from the current $23,660 annual salary (or $455 per week). @media only screen and (min-width: 0px){.agency-nav-container.nav-is-open {overflow-y: unset!important;}} [CDATA[/* >*/. Check out what FLSA laws say about exempt employees and what you can require of them. .manual-search ul.usa-list li {max-width:100%;} @media (min-width: 768px) {.ebsa-guidance .ebsa-row span {min-width: 150px;}} * Numbers provided are pursuant to New York State law and are higher than the federal FLSA thresholds. #block-googletagmanagerfooter .field { padding-bottom:0 !important; } $780 per … Exempt employees must be paid on a salary basis and must have exempt job duties. 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. FLSA Exemption Test Summaries According to current FLSA law, employees must earn at least $455 a week ($23,660 a year) to be exempt from overtime rules under all tests. An official website of the United States government. .h1 {font-family:'Merriweather';font-weight:700;} The FLSA recordkeeping regulations do not require that the same workweek be adopted for both non-exempt and exempt employees. The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Extra Pay. The exemptions provided by FLSA Section 13(a)(1) apply only to “white-collar” employees who meet the salary and duties tests set forth in the Part 541 regulations. .usa-footer .container {max-width:1440px!important;} The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. .manual-search ul.usa-list li {max-width:100%;} The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and. However, the rule makes a number of other important changes . 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. The final rule includes a provision allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually to satisfy up to 10% of the standard salary threshold. We previously published a blog post, anticipating the FLSA salary exempt threshold increase and providing tips for employers not planning to increase their salaries to meet the federal or state thresholds for exempt positions. The .gov means it’s official. 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. These requirements are outlined in the FLSA Regulations (promulgated by the U.S. Department of Labor). Whether the employer offers overtime to exempt employees is completely up to their own independent judgement. 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. part 541 with an effective date of January 1, 2020. Federal government websites often end in .gov or .mil.