Heads Up Employers, The Law Is Changing, Be Ready

Under the provisions of the federal law known as the Fair Labor Standards Act (FLSA), for an employee to be classified as “Exempt” from being paid overtime, the employee must meet the provisions of three (3) separate “tests”. Those are the salary basis test, the salary level test and the job duties test. If any one of those tests are not met, then the employee must be paid overtime whenever he/she works more than 40 hours within any one-week pay period.

On July 1, 2024, one of those tests is changing…..significantly. Presently, the salary level test requires that an employee must make a minimum salary of $35,568 per year or $684.00 per week. If the individual makes less than that amount, the employee must be paid overtime whenever he/she works more than 40 hours within any one-week pay period. The new salary level test will be changed to a minimum salary threshold of $43,888.00 per year or $844.00 per week.

Additionally, on January 1, 2025, the minimum salary level will increase again to an annual salary of $58,656.00 per year or $1,128 per week.

Please remember that any employee who does not meet these minimum salary thresholds must be paid overtime whenever the individual works more than 40 hours within any one-week period of time.

Employers must become aware of these changes and make decisions on how to proceed. If employees are not paid correctly, employers may find themselves investigated by the U.S. Department of Labor and charged with fines and penalties for not following the law.