What Employers Need to Know About the New FLSA Overtime Rule

最后更新于：2025-09-11 01:44:31

In any given overtime period, it comes down to which team can score more points. Starting in the third overtime period, teams don’t get a true possession and must alternate two-point conversion attempts. College football is known for its original overtime change that revolutionized the sport. Starting with bowl games in 1995, teams would start at the 25-yard line and would alternate possessions until one team scored and the other couldn’t.

Could You Be Exempt from Overtime Pay? The “White Collar” Exemptions

Virgin Islands, the Northern Mariana Islands and American Samoa as well as those for the motion picture industry. Failure to make and keep accurate records of hours worked and wages paid for non-exempt employees is itself a violation and can make it harder to resolve wage disputes. Understanding two key terms—”workweek” and “hours worked”—is essential for determining FLSA compliance, particularly regarding overtime pay. While the FLSA sets the federal standard, many states have stricter overtime laws. Employers must follow the law that provides the greatest benefit to employees. Wage and Hour’s enforcement of the FLSA is done by investigators stationed across the United States.

Common Overtime Violations Employers Must Avoid

The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime hours are worked on such days. Thus, as long as the employer pays the employee at least $684 on a weekly salary basis, the employer will be able to count these other forms of compensation toward meeting the minimum total compensation requirement ($107,432 per year). The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay (PDF) to be at least one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. Some exceptions apply under special circumstances to police and firefighters and to employees of hospitals and nursing homes.

Regulations

You also need to know which hours count as “hours worked” under the FLSA. As mentioned earlier, the general rule is that hours worked include all time an employee must be on duty, on the employer’s premises, or at a prescribed work location, from the start of the first main job activity to the end of the last one. If an employee earns less than $684 per week, they generally cannot be classified as exempt under the EAP rules, regardless of their job duties.

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This calculation must be performed for each workweek, because your regular rate can change from week to week depending on factors like bonuses earned or hours worked. Your regular rate cannot be less than the applicable federal, state, or local minimum wage. The regular rate is essentially your average hourly earnings for the workweek. It’s calculated by dividing your total compensation for the workweek (with some specific exceptions allowed by the FLSA) by the total number of hours you actually worked during that week. Changes to overtime rules under the Fair Labor Standards Act (FLSA) announced on April 23, 2023 affect most U.S. employers.

• Such technology is already a part of many workplaces and will continue to shape the labor market and HR.
• The overtime pay requirement cannot be met through the use of compensatory time off (comp time) except under special circumstances applicable only to state and local government employees.
• This game only went to one overtime, but is one of the greatest endings to a college football game that you will ever see.
• The “no tax on overtime” deduction is then taken by the employee on their individual income tax return, Form 1040.

Qualifications And Restrictions On “No Tax On Overtime” Provision

Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days. Department of Labor�s regulations prevents an employer from paying an employee at or above the minimum wage or at a higher overtime rate of pay. In addition, a number of states have enacted minimum wage and overtime pay laws, some of which provide greater worker protections than those provided by the FLSA.

• As a result of the changes, less employees will be considered exempt and employers will be liable for significantly more overtime pay.
• Ideal for employers and HR professionals, this members-only toolkit offers essential information on eligibility, salary thresholds, and job duties to ensure compliance and effective workforce management.
• Thus, as long as the employer pays the employee at least $684 on a weekly salary basis, the employer will be able to count these other forms of compensation toward meeting the minimum total compensation requirement ($107,432 per year).

Executive, Administrative, and Professional Fact Sheets

Revisions included increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for updating these earnings thresholds to reflect current earnings data. District Court for the Eastern District of Texas vacated the Department’s 2024 final rule. Consequently, with regard to enforcement, the Department is applying the 2019 rule’s minimum salary level of $684 per week and total annual compensation requirement for highly compensated employees of $107,432 per year. Lawsuits regarding the 2024 final rule are currently pending in two other federal district courts, and the United States has filed a notice of appeal from the November 15 decision. The Department will update this notice with additional information as it becomes available.

The overtime pay requirement may not be waived by agreement between the employer and the employee. The overtime pay requirement cannot be met through the use of compensatory time off (comp time) except under special circumstances applicable only to state and local government employees. The white-collar exemption applies to employees who perform primarily executive, administrative, and professional tasks. Workers who perform these tasks are considered to have more autonomous, managerial, or specialized roles justifying exemption from overtime. Therefore, if an employee’s duties are executive, administrative, and professional, and they satisfy the salary basis and salary level tests in the FLSA, they are not entitled to overtime pay under the FLSA.

District Court for the Eastern District of Texas vacated the Department’s 2024 final rule. Consequently, with regard to enforcement, the Department is applying the 2019 rule’s minimum salary level of $684 per week and total annual compensation requirement for highly compensated employees of $107,432 per year. However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees.

Understanding what counts as qualifying overtime is something employers should have on their to-do list, as not all overtime policies qualify for this federal deduction. This article is authored by OnPay, a top-rated payroll provider for small businesses with more than 30 years of experience in payroll, taxes, and small business compliance. The No Tax on Overtime provision is a flsa overtime rules targeted tax incentive aimed at giving working Americans more benefits from their additional hours.

Despite this new deduction, core overtime obligations remain unchanged. Similar to the tips deduction, for every $1,000 of income above the threshold, the deduction is reduced by $100, ensuring benefits target middle and lower-income workers. CDA members have access to a comprehensive human resources solution that includes payroll processing.