Salary Threshold

A salary threshold is the minimum amount of yearly income that employees must earn to be exempt from certain labor protections, such as overtime pay regulations under the Fair Labor Standards Act (FLSA). It helps determine whether an employee is classified as exempt or non-exempt from overtime pay requirements.

Example #1

For instance, if the salary threshold is $35,000 per year, employees earning below this amount must be paid overtime for hours worked over 40 in a workweek, while those above are exempt from overtime pay.

Example #2

If an employee earns $30,000 per year and works 45 hours a week, they should receive overtime pay for the additional 5 hours if they are non-exempt based on the salary threshold.

Misuse

Misuse of the salary threshold can occur when employers misclassify employees as exempt when they should be non-exempt, denying them overtime pay. This practice unfairly exploits employees by not compensating them for extra hours worked, violating their rights and diminishing their income.

Benefits

Setting a fair and adequate salary threshold ensures that employees are appropriately compensated for their work. It helps prevent exploitation and ensures that workers receive the pay they deserve for additional hours worked.

Conclusion

Ensuring that the salary threshold is accurately applied is crucial in protecting employees' rights and preventing unfair labor practices. By upholding a reasonable and just salary threshold, businesses can contribute to a more equitable and transparent workplace.

Related Terms

Fair Labor Standards Act (FLSA)