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FLSA Overtime Eligibility and Exemption

  

   
Campus at night

Overview

UPDATE 11/23/16 - Late yesterday we learned that a federal judge in Texas has entered a nationwide injunction blocking the U.S. Department of Labor (DOL) from implementing the Fair Labor Standards Act (FLSA) changes that were to take effect December 1, 2016.  The FLSA change was to modify the overtime eligibility requirements by increasing the required annual salary from $23,660 to $47,476. 

This injunction means that we will not be moving forward with implementing the FLSA changes at this time. It is expected that the DOL will appeal this ruling quickly, however, it is uncertain how long the appeal will take.  Human Resources will keep you informed as updates are received.


The U.S. Department of Labor (DOL) announced on May 18, 2016 that the minimum salary threshold will be raised to $913 per week, or $47,476 annually. The new rules will be effective December 1, 2016.

The Fair Labor Standards Act (FLSA) is a federal law with enforcement authority provided to the United States Department of Labor (DOL).  The Fair Labor Standards Act establishes requirements for minimum wage, eligibility for overtime, recordkeeping requirements and child labor standards.  On May 18, 2016, the Department of Labor issued final regulations that modified the overtime eligibility requirements by increasing the required annual salary from $23,660 to $47,476. The DOL will automatically update the salary level every three years using the 40th percentile of weekly earnings for full time salaried workers in the lowest paid quadrant of the country.

Under the FLSA regulations, a position is classified as exempt (salaried), only if the position meets the following tests:

  • Salary Basis – salary is not reduced for quality or quantity of work
  • Salary Test (as of December 1) – no less than $1,978.17 semi-monthly ($47,476 annually); cannot be prorated for part-time.  Exceptions to the salary level test are provided for employees who fall into specific categories – primarily teachers, doctors, lawyers, academic administrative personnel and outside sales. Those categories of employees do not need to meet the salary level test.
  • Duties Test – determined by Human Resources based on the job description on file and guidelines provided by the Department of Labor.