The Fair Labor Standards Act (FLSA) categorizes employees as either exempt or nonexempt, primarily affecting their eligibility for overtime pay. Employers must accurately classify their employees to comply with regulations and avoid penalties.
Determining Exempt Status
An employee is deemed exempt if they pass both the Salary Basis Test and the Salary Level Test and meet the requirements of at least one of the Duties Test.
✅ Salary Basis Test: is the employee paid a salary?
✅ Salary Level Test: does the employee's salary meet or exceed the required salary level?
✅ Job Duties Test: does the employee meet at least one job duties requirement?
Salary Basis Test
This test requires that an employee be paid on a salary basis, meaning they receive a fixed, predetermined amount of pay that is not subject to reduction based on the quality or quantity of work performed.
The employee must be paid their full salary for any week in which they perform work, regardless of the number of days or hours worked. However, there are certain exceptions where deductions from salary are permitted, such as for unpaid disciplinary suspensions or unpaid leave under the Family and Medical Leave Act.
Salary Level Test
The salary level test sets a minimum salary threshold that an employee must earn to qualify for exemption from overtime.
Federal versus US State Wage Threshold
The highest applicable threshold will be used in determining an employee's exempt status. If an applicable US State or Local threshold is higher than the applicable Federal Threshold, the State or Local Threshold will apply.
Federal Wage Threshold
January 1 2025 | July 1 2024 | January 1 2024 | |
Weekly Federal Wage | $1,128 | $844 | $684 |
Annual Federal Wage | $58,656 | $43,888 | $35,568 |
US State and Local Threshold
[ACCORDION] State by State US Thresholds
FLSA Applies means that the US Federal Fair Labor Standards Act thresholds apply.
State or Locality | 2025 Threshold | 2024 Threshold | 2023 Threshold |
Alabama | FLSA Applies | FLSA Applies | FLSA Applies |
Alaska | No change announced: FLSA may apply | $48,796.80 | $45,136 |
Arizona | FLSA Applies | FLSA Applies | FLSA Applies |
Arizona - Flagstaff | FLSA Applies | FLSA Applies | FLSA Applies |
Arkansas | FLSA Applies | FLSA Applies | FLSA Applies |
California | $68,640 | $66,560 | $64,480 |
Colorado | No change announced: FLSA may apply. | $55,000 | $50,000 |
Colorado - Boulder County | No change announced: FLSA may apply. | $55,000 | $50,000 |
Colorado - Denver | No change announced: FLSA may apply. | $55,000 | $50,000 |
Colorado - Edgewater | No change announced: FLSA may apply. | $55,000 | $50,000 |
Connecticut | FLSA Applies | FLSA Applies | FLSA Applies |
Delaware | FLSA Applies | FLSA Applies | FLSA Applies |
District of Columbia | FLSA Applies | FLSA Applies | FLSA Applies |
Florida | FLSA Applies | FLSA Applies | FLSA Applies |
Georgia | FLSA Applies | FLSA Applies | FLSA Applies |
Hawaii | FLSA Applies | FLSA Applies | FLSA Applies |
Idaho | FLSA Applies | FLSA Applies | FLSA Applies |
Illinois | FLSA Applies | FLSA Applies | FLSA Applies |
Illinois - Chicago | FLSA Applies | FLSA Applies | FLSA Applies |
Indiana | FLSA Applies | FLSA Applies | FLSA Applies |
Iowa | FLSA Applies | FLSA Applies | FLSA Applies |
Kansas | FLSA Applies | FLSA Applies | FLSA Applies |
Kentucky | FLSA Applies | FLSA Applies | FLSA Applies |
Louisiana | FLSA Applies | FLSA Applies | FLSA Applies |
Louisiana - New Orleans | FLSA Applies | FLSA Applies | FLSA Applies |
Maine | FLSA threshold applies | $41,401 | $41,401 |
Maryland | FLSA Applies | FLSA Applies | FLSA Applies |
Maryland - Montgomery Country | FLSA Applies | FLSA Applies | FLSA Applies |
Massachusetts | FLSA Applies | FLSA Applies | FLSA Applies |
Michigan | FLSA Applies | FLSA Applies | FLSA Applies |
Minnesota | FLSA Applies | FLSA Applies | FLSA Applies |
Minnesota - Minneapolis | FLSA Applies | FLSA Applies | FLSA Applies |
Minnesota - St Paul | FLSA Applies | FLSA Applies | FLSA Applies |
Mississippi | FLSA Applies | FLSA Applies | FLSA Applies |
Missouri | FLSA Applies | FLSA Applies | FLSA Applies |
Montana | FLSA Applies | FLSA Applies | FLSA Applies |
Nebraska | FLSA Applies | FLSA Applies | FLSA Applies |
Nevada | FLSA Applies | FLSA Applies | FLSA Applies |
New Hampshire | FLSA Applies | FLSA Applies | FLSA Applies |
New Jersey | FLSA Applies | FLSA Applies | FLSA Applies |
New Mexico | FLSA Applies | FLSA Applies | FLSA Applies |
New Mexico - Santa Fe County | FLSA Applies | FLSA Applies | FLSA Applies |
New York | $60,405 | $58,458 | $55,341 |
New York - New York City, Nassau, Suffolk, Westchester | $64,350 | $62,400 | $58,511 |
North Carolina | FLSA Applies | FLSA Applies | FLSA Applies |
North Dakota | FLSA Applies | FLSA Applies | FLSA Applies |
Ohio | FLSA Applies | FLSA Applies | FLSA Applies |
Oklahoma | FLSA Applies | FLSA Applies | FLSA Applies |
Oregon | FLSA Applies | FLSA Applies | FLSA Applies |
Pennsylvania | FLSA Applies | FLSA Applies | FLSA Applies |
Rhode Island | FLSA Applies | FLSA Applies | FLSA Applies |
South Carolina | FLSA Applies | FLSA Applies | FLSA Applies |
South Dakota | FLSA Applies | FLSA Applies | FLSA Applies |
Tennessee | FLSA Applies | FLSA Applies | FLSA Applies |
Texas | FLSA Applies | FLSA Applies | FLSA Applies |
Utah | FLSA Applies | FLSA Applies | FLSA Applies |
Vermont | FLSA Applies | FLSA Applies | FLSA Applies |
Virginia | FLSA Applies | FLSA Applies | FLSA Applies |
Washington |
$69,305.60 (50 or fewer employees) $77,968.80 (51 or more employees) |
$67,724,80 (all employees) |
$57,293.60 (50 or fewer employees) $65,478.40 (51 or more employees) |
Washington - Seattle |
$69,305.60 (50 or fewer employees) $77,968.80 (51 or more employees) |
$67,724,80 (all employees) |
$57,293.60 (50 or fewer employees) $65,478.40 (51 or more employees) |
Washington - Tukwila |
$69,305.60 (50 or fewer employees) $77,968.80 (51 or more employees) |
$67,724,80 (all employees) |
$57,293.60 (50 or fewer employees) $65,478.40 (51 or more employees) |
West Virginia | FLSA Applies | FLSA Applies | FLSA Applies |
Wisconsin | No change announced: FLSA threshold may apply |
$35,568 (Public employers) $36,400 (Executives and Administrators) $39,000 (Professionals) |
$35,568 |
Wyoming | FLSA Applies | FLSA Applies | FLSA Applies |
[/ACCORDION]
Job Duties Test
The duties test requires that an employee's job duties meet certain criteria to qualify for exemption. The specific criteria vary depending on the exemption category (e.g., executive, administrative, professional, computer, and outside sales).
To qualify as exempt from overtime under the FLSA a worker must meet at least one of the following job duties categories:
Category | Description |
Executive Employees |
|
Administrative Employees |
|
Learned Professionals |
|
Creative Professionals |
|
Computer Employees |
|
Outside Sales Employees |
|
Highly Compensated Employees (HCE) |
|
Frequently Asked Questions
[ACCORDION] Can I modify an employee's job duties so that they are exempt from overtime?
No. The job duties test is only one of three tests that must be met for an employee to qualify as exempt. An employee must be paid on salary, meet or exceed the required salary threshold, and meet the job duties requirement.
[ACCORDION] Does the Salary Threshold include incentive payments?
Non discretionary bonuses and commissions can count for up to 10% of the salary threshold. A non discretionary bonus or commission is tied to objective, pre-determined criteria that employees are entitled to receive if those criteria are met. Examples include meeting sales or production targets, or achieving retention or attendance goals.
[ACCORDION] What is the Salary Threshold for part time employees?
The salary threshold is not pro-rated for part time salaried employees.
This means that an employee on a part time (not hourly) contract earning below the salary threshold is entitled to overtime.