Looking to Benchmark Pay?
FLSA Overhaul
In August 2004, the Department of Labor update of the FLSA regulations was the first overhaul of the Act in over 50 years. The changes were designed to simplify the rules for the application of FLSA executive, administrative, or professional exemption tests, otherwise known as EAP exemptions. The law stated that for an employee to be exempt, the job had to:
- be salaried (a few exceptions exist)
- pay at least $455 per week or $23,660 per year
- have duties that meet certain tests
Current Overtime Rules
The current FLSA overtime threshold is $648 a week ($35,568 a year).
Employers may use nondiscretionary bonuses such as production, quality, attendance, and incentive payments (including commissions) paid on an annual or more frequent basis to satisfy up to 10 percent of the standard pay level.
To comply with these regulations, a job analysis of positions most likely impacted by the FLSA should be performed. For more information, see DLC Course 33: Job Analysis and Job Descriptions. To determine an employee's eligibility for overtime pay based on the new FLSA regulations, see ERI’s FLSA Overtime Exemption Testing tool.