2025 FLSA Alert: Big Changes That Could Impact Your Business
Attention businesses, we’ve got some crucial updates regarding the Fair Labor Standards Act (FLSA) that you should know about. Significant changes are coming on January 1, 2025, and if your businesses is impacted, action is required to stay compliant.
What’s Changing in 2025:
The Department of Labor is adjusting the salary levels that decide whether employees can be exempt from overtime and minimum wage rules. To be classified as exempt, an employee needs to:
Receive a set salary that is not dependent on hours worked.
Meet a new weekly salary threshold which is increasing.
Primarily perform executive, administrative, or professional tasks as defined by the FLSA.
What This Change Does NOT Mean:
It does NOT mean you must give raises to comply.
It does NOT change the duty test.
The basis of the FLSA change is to protect workers from NOT being paid overtime.
The New Salary Threshold
On January 1, 2025, the new threshold is $1,128 per week, which equals $58,656 a year.
Exempt Highly Classified Employees must be paid the same salary minimums listed above and at least have a total annual compensation of $151,164.
Overtime Eligibility
Beginning on January 1, 2025, salaried employees earning $58, 656 or less annually will become eligible for overtime pay. This means that any hours they work over 40 in a week will require overtime payment at time-and-a-half. Not complying with these changes can result in penalties, back pay, or even legal complications. It’s essential to review your payroll practices now, so as to avoid these issues later.
Your Options
You have several choices when it comes to complying with the new rules:
Raise Salaries: You can adjust your employees’ pay to meet the new threshold and maintain their exempt status.
Reclassify employees: You could switch impacted salaried employees to hourly, which gives you more flexibility to manage their schedules and limit overtime. This option makes it easier to monitor their hours, and also helps to minimize extra pay for overtime.
Start Paying Overtime: You can keep salaried employees as they are but begin paying them overtime for hours worked over 40 each week. this approach allows you to stick with their salary structure while following the new rules.
Check Job Description: Make sure your employees classifies as exempt are, in fact, performing the duties required by the FLSA.
Why Take Action Now?
Avoid last-minute stress and potential fines and penalties by taking action early. Addressing these changes ahead of time will help you to make the right decisions for your business and stay on the right side of all compliance requirements.
Need help? Our team is ready to assist with anything you might need. Feel free to reach out anytime.
Contact us: HR@peopleworx.io
If you need help with workforce management, please contact PeopleWorX at 240-699-0060 | 1-888-929-2729 or email us at HR@peopleworx.io
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