What is the salary threshold for exempt status?

If you work in the United States and are classified as an exempt employee, it means that you are not entitled to overtime pay under the Fair Labor Standards Act (FLSA). However, not all employees can be classified as exempt. In order to be considered exempt, employees must meet certain requirements set by the Department of Labor, including earning a salary that meets a minimum threshold.

The salary threshold for exempt status is an important factor in determining whether an employee can be considered exempt from overtime pay. In order to qualify for exempt status, employees must earn at least the minimum salary threshold set by the Department of Labor. As of January 2020, the minimum salary threshold for exempt status is $684 per week, or $35,568 annually.

This means that in order to be classified as exempt, employees must earn at least $684 per week, regardless of how many hours they work. If an employee earns less than this amount, they may be classified as non-exempt and are entitled to overtime pay for any hours worked over 40 in a workweek.

FAQs:

1. What happens if an employee does not meet the salary threshold for exempt status?

If an employee does not meet the salary threshold for exempt status, they must be classified as non-exempt and are entitled to overtime pay for any hours worked over 40 in a workweek.

2. Can employers pay exempt employees hourly instead of a salary?

No, in order to be classified as exempt, employees must be paid on a salary basis. This means they must receive a predetermined amount of pay each pay period regardless of the quantity or quality of work performed.

3. Are there any exceptions to the salary threshold for exempt status?

Yes, certain employees, such as teachers, doctors, and lawyers, are exempt from the salary threshold requirement. These employees may be classified as exempt regardless of their salary level.

4. Is the salary threshold for exempt status the same in every state?

Yes, the salary threshold for exempt status is a federal requirement set by the Department of Labor and is the same in every state.

5. Can employers offer additional compensation, such as bonuses or commissions, to help employees meet the salary threshold for exempt status?

Yes, employers can offer additional compensation, such as bonuses or commissions, to help employees meet the salary threshold for exempt status. However, these additional payments must meet certain criteria set by the Department of Labor.

6. Is the salary threshold for exempt status adjusted regularly?

Yes, the salary threshold for exempt status is adjusted periodically by the Department of Labor to account for inflation and changes in the economy.

7. Can employers reduce an employee’s salary to bring them below the salary threshold for exempt status?

Employers cannot reduce an employee’s salary for the purpose of bringing them below the salary threshold for exempt status. Doing so could lead to violations of wage and hour laws.

8. Are part-time employees eligible for exempt status?

Part-time employees can be classified as exempt if they meet the salary threshold and other requirements set by the Department of Labor.

9. Can exempt employees be required to work overtime without additional pay?

Exempt employees are not entitled to overtime pay, regardless of the number of hours worked. This means they can be required to work overtime without additional compensation.

10. Can employees be exempt from both the salary threshold and the duties test?

No, in order to be classified as exempt, employees must meet both the salary threshold and the duties test set by the Department of Labor.

11. Are independent contractors eligible for exempt status?

Independent contractors are not eligible for exempt status since they are not considered employees of the company.

12. Can exempt employees be paid on a commission-only basis?

Exempt employees must be paid on a salary basis, not on a commission-only basis. Commission-only pay does not meet the salary basis requirement for exempt status.

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