New 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.