© 2024 Seyfarth Shaw LLP | www.seyfarth.com Classification Guidebook | 35 What is the FLSA and What Do the Latest Changes Mean? The FLSA is a federal law enforced by the DOL. The FLSA establishes the federal minimum wage, overtime pay requirements, recordkeeping requirements, and child labor restrictions. The FLSA’s basic premise is that all employees are eligible for overtime pay, unless they satisfy the criteria to qualify for an exemption. Ultimately, the decision on whether a position is exempt must be legally defensible. Employees in jobs that do not satisfy an exemption are considered “non-exempt” and must receive overtime premium pay for all hours worked in excess of 40 hours in a given workweek. Recent revisions to the FLSA’s regulations have modified the FLSA’s most utilized exemption tests. The key change involves the minimum salary level to satisfy the exemption for executive, administrative, or professional employees. Currently, employees whose primary duty is an executive, administrative, or professional function may, as a general matter, but must be paid in compliance with the salary requirements. Phase 1 rolled out on July 1, 2024, where exempt employees need to be paid a salary of at least $844 per week (or $43,888 per year) to remain exempt. That number will increase on January 1, 2025, to a salary of at least $1,128 per week (or $58,656 per year.) As we move forward, we will provide information to help you remain aware of the developments and prepared to handle any questions your employees ask. In the meantime, please do not hesitate to contact [________] at [________] with any questions or concerns. 3. Sample Email to Managers of Affected Employees TO: Managers of Affected Employees RE: Your Employees’ Status or Compensation Changes We wanted to inform you that we will be changing the [status or salary] of certain positions that you supervise in response to recent changes to the Fair Labor Standards Act. Following our analysis, we have determined that the following jobs that you supervise will be impacted: Your employees will be notified of the change on or before [_________] and will begin entering time on a daily basis immediately. Your employees are all still highly valued professionals at our company. There is no change to benefits, PTO days, or stock eligibility. This change is driven by forces external to the employer—namely, dramatic changes to wage and hour laws—that the employer has been forced to respond to in order to ensure continued legal compliance.
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