Law about salaried employees

The Fair Labor Standards Act

The Fair Labor Standards Act is a Federal law that applies to all salaried employees in the United States. This law sets the minimum wage, overtime pay, and child labor standards. The Fair Labor Standards Act also prohibits discrimination against employees based on their race, color, religion, sex, or national origin.

History of the Fair Labor Standards Act

The Fair Labor Standards Act of 1938 (FLSA) is a federal law that sets standards for minimum wage and overtime pay. The law also establishes child labor protections.

The FLSA was enacted in response to the poor working conditions during the Great Depression. Many workers were forced to work long hours for little pay. Children were often employed in dangerous jobs.

The FLSA has been amended several times since it was first enacted. The most recent amendments went into effect in 2004. These amendments raised the minimum wage and expanded the overtime protections for workers.

The FLSA applies to most private sector employers and all public sector employers. There are some exceptions, such as small businesses and certain types of professionals.

If you think your employer is not following the FLSA, you can file a complaint with the U.S. Department of Labor’s Wage and Hour Division.

What the Fair Labor Standards Act covers

The Fair Labor Standards Act (FLSA) sets basic minimum wage and overtime pay standards. These standards are enforced by the Wage and Hour Division of the U.S. Department of Labor.

The Act applies to employees engaged in interstate commerce, including those employed by communications and transportation companies. The FLSA also sets standards for employment that are applicable to all enterprise engaged in interstate commerce, regardless of size. These include minimum wage, child labor and record keeping provisions.

The FLSA does not cover persons who are not considered employees under the Act, including independent contractors, farm workers, certain seasonal workers, casual babysitters, and persons employed by their parents or spouses. In addition, the FLSA does not cover certain types of employment that are specifically exempted from its requirements.

Exemptions from the Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments. The wage provisions of the FLSA are enforced by the Wage and Hour Division. Some workers are exempt from the wage and hour provisions. This section will explain some of the more common exemptions.

The “white collar” exemptions

The FLSA generally requires covered employers to pay their employees at least the minimum wage for all hours worked and overtime pay at a rate of one and one-half times the employees’ regular wages for all hours worked over 40 in a workweek.

However, the FLSA contains several “white collar” exemptions that may apply to executive, administrative, professional, and outside sales employees. When an exemption applies, an employer is not required to pay overtime or the minimum wage to the employee.

To qualify for a white collar exemption, an employee generally must meet certain “duties tests” as well as be paid a salary of at least $455 per week (or $380 per week if employed before 2004). In addition, computer professionals may qualify for an exemption if they are paid at least $27.63 per hour.

Duties Tests: To qualify for one of these exemptions, employees generally must meet certain duties tests. For example, an executive employee’s primary duty must be managing the enterprise in which he or she is employed or a recognized department or subdivision of the enterprise; administrative employees’ primary duties must include office or non-manual work directly related to management policies of general business operations; and professional employees’ primary duties must consist of work that requires knowledge of an advanced type in science or learning customarily acquired by prolonged intellectual instructing and study in a field of science or learning. The following examples provide more specific guidance:

An attorney may qualify as exempt under either the “learned professional” exemption or the “administrative” exemption depending on whether his/herprimary duty consists of legal work that requires advanced legal knowledge and performance of work requiring application of such knowledge (the “learned professional” exemption) or his/herprimary duty consists of office work that is directly related to management policiesor general business operations (the “administrative” exemption). If paralegals customarily perform substantial legal research and writing as part of their job duties under supervision by an attorney or are engaged in this activity incident to providing legal services at attorney direction and on attorney behalf, they too may qualify as exempt learned professionals.

The “blue collar” exemptions

The FLSA’s “blue collar” exemptions generally apply to manual laborers (“blue collar” workers) who perform work involving repetitive operations with their hands, physical skill and energy. The “blue collar” exemptions also extend to some professional occupations, such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and those engaged in manufacturing and mining. To qualify for an exemption, an employee’s specific job duties must meet all the requirements of the Department’s regulations. In addition, exemption status is not determined by the employee’s job title – it depends on the actual duties performed.

The following are examples of positions that may qualify for a “blue collar” exemption:

-Assembly line worker in a factory who puts together products or parts
-Construction worker who pours concrete or erects scaffolding
-Mechanic who repairs vehicles or equipment
-Miner who digs coal or minerals from the ground
-Printer who sets type for printing presses

Recent changes to the Fair Labor Standards Act

In recent years, the Fair Labor Standards Act has been amended to better protect employees who are paid a salary. These changes have made it easier for employees to get the overtime pay they deserve. Let’s talk about some of the changes that have been made.

The new salary threshold

The Department of Labor’s final rule updates the salary threshold for exemption, effective January 1, 2020. The rule: -establishes a new “standard salary level” of $684 per week (equivalent to $35,568 per year for a full-year worker); -updates the “total annual compensation requirement” for highly compensated employees (HCE) subject to a minimal duties test to $107,432 per year; and -makes several changes to the “duties test”

The new duties tests

The most significant changes to the Fair Labor Standards Act (FLSA) in many years go into effect on December 1, 2016. The U.S. Department of Labor has issued new regulations that make it more difficult for an employee to be classified as exempt from the overtime pay requirements of the FLSA. The new regulations will not become effective until December 1, 2016, but now is the time for employers to start preparing for the changes.

The FLSA generally requires that employees be paid overtime — 1½ times their regular rate of pay — for all hours worked in excess of 40 in a workweek. However, there are several exemptions from the overtime requirements, including an exemption for executive, administrative, and professional employees (the “white collar” exemptions). To qualify for a white collar exemption, an employee must satisfy two tests: a duties test and a salary test.

Under the current rules, an employee who meets both the duties test and the salary test is exempt from overtime pay. The new regulations maintain the existing duties tests but make changes to the salary test that will result in many more employees becoming eligible for overtime pay. Specifically, the new regulations:
-Raise the minimum salary required for exemption from $455 per week ($23,660 per year) to $913 per week ($47,476 per year);
-Allow employers to use nondiscretionary bonuses and commissions (which are paid periodically) to satisfy up to 10 percent of the new salary level;
-Require salaries to be updated every three years to maintain exemption status; and
-Provide a mechanism for automatic increases in the salary level without further rulemaking.

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