What is FLSA?
The Fair Labor Standards Act (FLSA), first enacted in 1938, establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.
- Established tests that must be met in order for an employee to be exempt from overtime pay eligibility.
- Tests/rules for classifying covered employees as “exempt” or “nonexempt”
- Requires overtime compensation to nonexempt employees for all hours over 40 in a workweek.
- Usually 1.5 times regular pay rate – Government agencies can award compensatory time.
Upcoming Changes – Final Rule for Overtime
On May 18, 2016, President Obama and Secretary Perez released the US Department of Labor’s final rule on overtime. The final rule focuses primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt. See the Department of Labor video below for a summary of the rule.
- Raised minimum salary required for employee to be classified as exempt from overtime.
- Salary minimum nearly doubled from $455 weekly ($23,660) to $913 weekly ($47,476).
- The minimum salary threshold will be automatically updated every three years to remain at the 40th percentile of the overall labor market. (starting 2020)
- NOT pro-rated for part-time.
- Changes effective December 1, 2016.
Video: OVERTIME: It’s about time.
- Department of Labor FLSA Resources
- PowerPoint Presentation: MURC FLSA Overtime Rule Change
- What does this change mean to MURC?
- Who is impacted by the change?
- Can an employee maintain his or her exemption status?
- Duties/Exemption Test
- Next Steps: Exploring Options & Justification
- Time Management for Non-Exempt Employees
- Travel for Non-Exempt Employees