Fair Labor Standards Act Changes
by Rachel Johnson

Fair Labor Standards Act Changes

Everyone is talking about the new Fair Labor Standards Act changes. Below are a few things to consider when looking at complying with this new rule:

  • The FLSA applies to most employers but employers should verify this prior to seeing if they need to comply.
  • If the FLSA applies, then you need to evaluate whether exempt employees will meet the new salary threshold of $913 per week.
  • Up to 10% of salary can come from quarterly bonuses, but you must follow the rules here.
  • The salary level will be automatically increased every 3 years going forward.
  • The threshold for the Highly Compensated Employee is rising from $100,000 to $134,004.
  • The duties tests did not change but it might be a good idea to review them at this time to ensure you meet the tests for each category.
  • Other areas that are common issues are travel pay and on call pay.
  • Keep in mind – EPLI (Employment Practices Liability Insurance) exclusions for claims made for violations under the FLSA, and the options for coverage for defense are usually an additional cost to employers.

All of the above information is taken from the U.S. Department of Labor, Wage and Division Fact Sheets.

Please note: We are not acting as your attorney in providing this advice. The information and materials contained herein are provided for general information purposes only. It is not intended to constitute legal advice, other advice, or opinions on any specific matters. They are not intended to replace the advice of a qualified attorney, plan provider, or other professional advisor who represents you. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used as or considered a ‘covered opinion’ or other written tax advice, and should not be relied upon for any purpose other than its intended purpose.

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