Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, record keeping, and youth employment standards.  All employers in the private sector and in Federal, State, and local governments must abide by this law.

Earlier this year, the U.S. Department of Labor updated regulations governing exemptions to the Fair Labor Standard Act’s (FLSA’s) overtime pay requirements for executive, administrative, and professional employees (known as the “white collar” exemptions). 

Under the FLSA regulations, employees are either designated as nonexempt hourly employees and eligible for overtime pay, or as exempt salaried employees who are not eligible to receive overtime pay.

To qualify a position as exempt, an employee must satisfy all three tests below:

  • Perform duties that qualify for an exemption;
  • Paid a salary above the minimum salary threshold; and
  • Paid on a “salary basis."

Nonexempt employees are eligible for overtime pay at time-and-one-half for any hours worked over 40 hours per week.