2020 Fair Labor Standards Act Changes

The Fair Labor Standards Act (FLSA) is the federal law that determines which employees are eligible for overtime pay and which are ineligible.  Unless exempt, employees covered by the FLSA must receive overtime pay for hours worked over 40 in a workweek at a rate not less than one-and-one-half times their regular rate of pay.

On September 24, 2019, the Department of Labor (DOL) announced an update to the salary threshold for exemptions to the FLSA’s overtime pay requirements.  The final rule is effective January 1, 2020. DOL will raise the standard salary threshold from its current level of $455 per week or $23,660 annually to $684 per week or $35,568 annually.  DOL’s salary level test is one of the tests that determine which employees qualify for overtime pay.

Under FLSA overtime regulations, employees are designated as nonexempt hourly employees who are eligible to receive overtime pay or as exempt salaried employees who are not eligible to receive FLSA overtime pay. To qualify as exempt, an employee must satisfy the following three tests:

  • Have a salary above the minimum salary threshold;
  • Be paid on a “salary basis;” and
  • Perform duties that qualify for an exemption.

FLSA Resources