What is the salary level test?
The FLSA salary level test revised effective August 23, 2004 requires that an employee’s salary must be at least $455 a week in order to be considered exempt from the overtime provisions. An employee with a salary less than $455 a week must be nonexempt. Part time employees may be nonexempt even though their annualized salary is well over $455 a week. For example, an employee with an annualized salary of $40,000 and an FTE of .5 would be paid $385 a week and be nonexempt. Here is the formula to use when determining whether an employee’s employment arrangement meets the salary level test: When using an annual rate: (Employee’s annual rate × FTE) ÷ 52 weeks Example: ($40,000 × .50) ÷ 52 = $384.
