FLSA stands for the Fair Labor Standards Act. The FLSA sets standards for workplaces specific to the federal minimum wage, overtime pay, exempt vs non-exempt, and more. You can learn more about the FLSA at the U.S. Department of Labor’s website: Wages and the Fair Labor Standards Act

What Are the Recent FLSA Changes?

Earlier in 2024, the FLSA announced they would raise the minimum salary with a 2-tier approach taking effect in July of 2024 and January of 2025. On Friday, November 15, 2024, however, “A federal judge in Texas… blocked a new rule… that would have expanded access to overtime pay to millions more salaried workers across the U.S.” (view the full article on NPR.com).

What Do These FLSA Changes Mean for Your Business?

• Salary Minimums: This federal court ruling means that you no longer need to reclassify your salary minimums. The prior salary threshold of $35,568 is “poised to go back into effect.”

• Salary Adjustments: Many employers were preparing for or already making changes to annual salaries for their team, to accommodate the prior requirements. If you are in this group and considering adjusting those salaries again with this new ruling, you may want to think again. Keep in mind that rolling back salary adjustments is not the best solution when it comes to employee morale, and can have bigger implications: https://www.linkedin.com/posts/ashleyherd_dol-employmentlaw-exemptsalary-activity-7263283544905412609-s-U1?utm_source=share&utm_medium=member_desktop

• Training for Your Team: Even though this ruling means no immediate changes are needed, it’s a smart move to keep your hiring managers up to date on compensation thresholds, overtime protections, and ongoing FLSA changes.

An Overview of Exempt vs Non-Exempt Employees

Exempt status means you’re not eligible for, i.e. exempt from receiving overtime pay. Exempt employees typically include business executives, highly compensated employees, administrative professionals, accountants, lawyers, and more.

This Fisher Phillips Article provides insight for employers on immediate next steps in navigating this news. You can also reach out to a trusted recruiting partner at Goodwin Recruiting, to help provide additional guidance for your management team and hiring managers – both now and in the future – specific to FLSA adjustments, minimum salary thresholds, overtime pay requirements, and impacts on your team.