Fair Labor Standards Act (FLSA) Overview of Federal and State Policies - Key Provisions

Sep 18, 2026

Uploaded by Kurz

Fair Labor Standards Act (FLSA) overview explains federal and state compliance expectations, including fair labor standards review, exemption rules, and work time/recordkeeping requirements. The material outlines major FLSA provisions such as minimum wage, overtime and hours-of-work rules, child labor restrictions, and enforcement by the U.S. Department of Labor. It clarifies the meaning of exempt versus non-exempt status, details the 2020 minimum salary threshold test, and describes executive exemption criteria, including primary duty and management authority.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages60

Reading Time2 h 31 min

AccessFree to download

Fair Labor Standards Act (FLSA) Overview

Fair Labor Standards Review

Overview of Exemptions

Worktime and Recordkeeping Requirements

Overtime, Exceptions, and Unauthorized Overtime

Police Pay and Gap Hours

Compensatory Time Off

Major Provisions of FLSA

Minimum Wage

Exemptions

Overtime and Hours of Work

Recordkeeping Requirements

Child Labor Restrictions

What Does Exempt Mean?

Exempt vs Non-Exempt (Subject to FLSA)

Exempt Employees

Salary Basis and Pay Stability

Impact of Fluctuating Hours

Recordkeeping and Equal Pay Concepts

FLSA Minimum Salary Threshold Test

January 1, 2020 Threshold Change

Bonuses/Incentives Up to 10%

Part-Time Appointment Treatment

Executive Duties and Executive Exemptions

Executive Exemption Qualification Tests

Primary Duty: Management or Not?

Executive Criteria Guidelines

Fair Labor Standards Act (FLSA) Overview of Federal and State Policies Department of Human Resources • Fair Labor Standards Review • Overview of Exemptions FLSA • Worktime/Recordkeeping Requirements • Unauthorized Overtime • Overtime and Overtime Exceptions • Police Pay and Gap Hours • Compensatory Time Off Major Provisions of FLSA • Establishes Minimum Wage ($7.25 effective 7/24/09) • Exemptions • Overtime and Hours of Work • Recordkeeping Requirements • Child Labor Restrictions • Enforced by US Dept. of Labor, Wage Hour Division • Each university accountable-policy US Department of Labor, Wage Hour Division • DOL Wage Hour Offices in Charlotte and Raleigh • Overtime violation liable 2 years back pay • Willful violations liable 3 years • May be prosecuted criminally and fined • May also be subject to civil penalty • In 2010, 90% of employee class action lawsuits were work/hour (other 10% are FMLA, ADA, etc.) What Does Exempt Mean? • FLSA regulations: • Exempt or not covered by FLSA (for overtime and minimum wage) • Non-Exempt or subject to the FLSA = covered by the FLSA (also called Subject to the FLSA) Exempt Employees • A FLSA exempt employee is “salaried”; that is, paid on an annual basis. • Pay not affected by fluctuations in hours worked or hours in excess of 40 per week. • Non-exempt state “salaried” employees are affected by fluctuations in hours worked thus do not meet exempt criteria • No additional compensation due exempt employee who works over 40 hours • Subject to recordkeeping and equal pay of FLSA • Number of hours worked “is a matter determined between the employer and the employee” or what is necessary to complete job FLSA Minimum Salary Threshold Test • Effective January 1, 2020, the US Department of Labor changed the new minimum salary for which an employee can be designated as exempt from overtime requirements from $455 per week or $23,660 per year to $684 per week or $35,568 per year . • Employers are able to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices . • Pay for part-time appointments will not be pro-rated. An employee with a .75 appointment with a fulltime rate of $45,000 (above the minimum salary threshold) is paid $33,750. $33,750 is below the new minimum salary threshold, and therefore, the employee will be nonexempt. Executive Duties Executive Exemptions To qualify for executive exemption, all of the following tests must be met: • Employee must be paid not less than $684 per week; • Primary duty is management of the enterprise or of a customarily recognized department or subdivision ; Key now is “primary duty” not just % of exempt time • Customarily and regularly directs the work of two or more other employees; and • Authority to hire or fire other employees or whose suggestions and recommendations as to hiring, firing, advancement, promotion or other change of status of other employees are given particular weight. Is Primary Duty Management or Not? Factors to consider include, but are not limited to: • Relative importance of the exempt duties; • Amount of time spent performing exempt work; • Relative freedom from direct supervision; and • Relationship between the employee’s salary and the wages paid to other employees for the same kind of nonexempt work • Primary duty does not have to be 50% of job duties; it can be less Executive Criteria Guidelines • Working foreman is not executive • Same work as non-exempt subordinates = non-exempt • Not just supervisor (must be in charge) • Easiest of three exemption criteria to use • May train employees in non-exempt duties

FAQs

What does “exempt” mean under the FLSA?

“Exempt” means the employee is not covered by FLSA overtime and minimum wage requirements. “Non-exempt” employees are subject to the FLSA and are covered for overtime and minimum wage purposes.

What changed in the FLSA minimum salary threshold test effective January 1, 2020?

The minimum salary threshold increased from $455 per week ($23,660 per year) to $684 per week ($35,568 per year). The guidance also notes employers may use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level.

How is an employee evaluated for executive exemption?

Executive exemption requires meeting all tests: the employee must be paid at least $684 per week, the primary duty must be management of the enterprise or a recognized department/subdivision, the employee must customarily and regularly direct two or more employees, and they must have authority to hire or fire or provide recommendations with particular weight.

What factors help determine whether the primary duty is management or not?

Factors include relative importance of exempt duties, time spent performing exempt work, freedom from direct supervision, and how the employee’s salary relates to wages of non-exempt employees for the same kind of work. The material also states primary duty does not have to be 50% of job duties.

Sep 18, 2026

Uploaded by Kurz