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What is FLSA?

The Fair Labor Standards Act first came into being in 1938 to establish worker protections around compensation, especially pertaining to minimum wage and overtime rates.

The New Rule on Overtime

On May 18, 2016, the Department of Labor issued a final rule, the "Overtime" Rule. The Final Rule focuses on distinguishing overtime-eligible employees from those who are exempt from overtime pay.

Need more resources?

The Department of Labor has great resources about the Fair Labor Standards Act and, specifically, the New Rule.

UPDATE

The Rule will not go into effect on December 1, 2016. On November 22, 2016, a federal judge blocked implementation of the new FLSA Rule by granting a preliminary injunction.  For more, click here.

We will update this webpage as new information becomes available.

 

Background

The Fair Labor Standards Act first came into being in 1938 to establish worker protections around compensation, espeically pertaining to minimum wage and overtime rates. In 2014, President Obama requested new, updated regulations because it had been more than a decade since the last time the minimum salaries were adjusted.

Key Provisions of the New Rule

On May 18, 2016, the Department of Labor issued a final rule, the "Overtime" Rule. The Final Rule focuses on distinguishing overtime-eligible employees from those who are exempt. Exempt employees are not eligible for overtime pay.

  • The Rule goes into effect December 1, 2016.
  • Every three years, the minimum salary and compensation levels will increase through a process called automatic indexing, beginning January 1, 2020.
  • Standard salary level was increased to $47,476 per year or $913 per week.
  • Employees making at least $913 per week must also pass a job duties test to be considered exempt.
  • Standard salaries can include other non-discretionary means of satisying up to 10% of $913 per week requirement, including incentive payments and comissions. In this case, these non-discretionary means must be paid at least quarterly.
  • Highly Compensated Employees (HCEs) minimum salary was increased to $134,004 and must be met without regards to non-discretionary means.
  • Job duties criteria did not change.