The Fair Labor Standards Act (FLSA) is the federal law that determines which employees are eligible for overtime pay and which are ineligible. In March of 2014, President Obama directed the Secretary of the U.S. Labor Department (DOL) to make changes to the 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 FLSA overtime regulations, employees are designated as nonexempt hourly employees who are eligible to receive overtime pay or as exempt salaried employees who are not eligible to receive FLSA overtime pay. To qualify as exempt, an employee must satisfy the following three tests:

  • Have a salary above the minimum salary threshold;
  • Be paid on a “salary basis;” and
  • Perform duties that qualify for an exemption.

If an employee is designated as nonexempt, the employee is eligible for overtime pay and must be paid at time-and-one-half for hours worked over 40 per week.

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