Exempt and Non-Exempt Employees

Under the Fair Labor Standards Act (FLSA), most employers are required to pay overtime to employees who work more than 40 hours in a given workweek at a rate of one and one-half times the employee’s regular rate of pay. There are many exceptions to this general requirement for employees who perform certain types of work – most notably, for “white-collar” employees.

The Department of Labor's (DOL) final overtime regulations, effective January 1, 2020, increase the current minimum salary threshold for exemption to $684 per week ($35,568 annually). The total annual requirement for the exemption of highly compensated employees increases to $107,432 per year. The DOL's final rule makes no changes to the duties tests required for exemption. Under the final rule, employers may use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level. The salary threshold for American Samoa will remain $380 per week. The DOL has established a special salary level of $455 per week for Puerto Rico, the U.S. Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands. The DOL is increasing the special base rate for employees in the motion picture producing industry to $1,043 per week. The DOL states that it intends to update the salary thresholds more regularly in the future through notice-and-comment rulemaking, and not by an automatic updating process.