Wage & Hour
Wage & Hour Compliance Tools
Free tools for FLSA overtime exemptions, salary thresholds, and the white-collar duties test.
Reviewed by theComplianceToolsLibrary Editorial Team · Last updated
The Fair Labor Standards Act (FLSA) sets the federal floor for minimum wage, overtime, and recordkeeping. Most wage-and-hour compliance comes down to two questions: who must be paid overtime, and how that overtime is calculated.
The stakes are high. Misclassifying an employee as exempt, or miscalculating the regular rate, creates back-pay liability that compounds across every affected worker and pay period. Many states layer higher minimum wages, higher salary thresholds, and stricter duties tests on top of the federal rules, so the controlling standard is whichever is most protective of the employee.
Key concepts
- Exempt vs. non-exempt
- Non-exempt employees must receive overtime; exempt employees who meet the salary and duties tests do not.
- Salary-basis test
- Exempt white-collar employees must be paid a fixed, predetermined salary that is not subject to improper deductions.
- Duties test
- The actual primary duties — not the job title — determine whether an exemption applies.
- Regular rate
- Overtime is 1.5× the regular rate, which includes most bonuses and incentive pay, not just base wages.
Frequently asked questions
What does wage-and-hour compliance cover?
Minimum wage, overtime eligibility and calculation, hours-worked rules, and recordkeeping under the FLSA and any stricter state laws.
How do I know if an employee is exempt from overtime?
They must be paid on a salary basis at or above the threshold and perform exempt duties. The FLSA Overtime Exemption Checker walks through both tests.
Do state laws change the overtime analysis?
Yes. Several states set higher salary thresholds and stricter duties tests; apply the standard most protective of the employee.