Salary Threshold for Exempt Employees

New Salary Threshold For Exempt Employees

Salary Threshold for Exempt Employees

Effective January 1, 2020, the salary level for an employee to qualify for the white-collar exemption of the Fair Labor Standards Act (FLSA) has been raised from $455 per week to $684 per week ($35,568 per year).

To be exempt from overtime under the white-collar exemptions, employees must:

  • be paid a salary of at least $684 per week; and
  • meet the certain duties tests.

If you have employees who have been treated as exempt in the past but do not meet the new $684 per week threshold, they are no longer exempt employees and they must be paid 1.5 times their regular hourly rate for hours worked in excess of 40 in a workweek.

The new rule also raises the threshold for highly compensated employees from $100,000 a year to $107,432. Those employees must be paid at least $684 per week on a salary or fee basis.