The Fair Labor Standards Act (FLSA) is a federal law that sets minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and federal, state, and local governments. The FLSA also includes provisions for exempting certain employees from overtime pay requirements. One of the most common exemptions is the executive, administrative, or professional exemption. To qualify for this exemption, an employee must meet certain duties tests and salary level tests. The salary level test requires that the employee be paid a salary of at least $684 per week ($35,568 per year) as of 2023. This amount is updated every three years, and the next update is scheduled for 2025.
The FLSA exempt salary threshold is important because it determines which employees are eligible for overtime pay. Employees who are paid below the salary threshold are entitled to overtime pay for any hours worked over 40 in a week. Employees who are paid above the salary threshold are not entitled to overtime pay, regardless of the number of hours they work. The salary threshold is also important because it can affect an employee’s eligibility for other benefits, such as health insurance and paid time off.
