As 2025 progresses, businesses must ensure compliance with the Fair Labor Standards Act (FLSA) to avoid potential fines and legal issues. The FLSA governs critical aspects of employment law, including minimum wage, overtime pay, and classification standards, which are essential for protecting workers’ rights. With new adjustments to minimum wage thresholds and updates to overtime eligibility requirements, now is the time for employers to ensure their policies align with 2025 standards. SolveHR is here to help you navigate these complexities and remain compliant. 

Why FLSA Compliance Matters in 2025 

Failing to comply with FLSA regulations can lead to costly penalties, wage disputes, and potential harm to your business’s reputation. Regular FLSA compliance checks help businesses avoid these issues while fostering a positive and fair workplace culture. By understanding this year’s updates to minimum wage and overtime regulations, employers can better manage payroll, reduce turnover, and maintain trust with their workforce. 

2025 Minimum Wage Updates 

Federal and state minimum wage laws are subject to annual changes, and many states and cities have announced new wage increases for 2025. Here’s a summary of what employers need to know: 

1. Federal Minimum Wage 
   • The federal minimum wage remains at $7.25 per hour for non-exempt employees. However, some industries, such as federal contractors, may have a higher minimum wage requirement under federal law. Be sure to check if your business or any specific contracts are subject to different federal wage requirements. 
2. State and Local Minimum Wages 

• • Numerous states and cities have implemented their own minimum wage rates, often surpassing the federal minimum. Many of these rates have increased for 2025, reflecting adjustments for inflation and cost of living. 

• • Employers should review all applicable state and local minimum wage laws, as they take precedence over the federal rate when higher. Ensure that employees across different locations are paid according to their region’s standards to avoid compliance issues.
    

2025 Overtime Regulations 

The FLSA requires that non-exempt employees receive overtime pay for hours worked beyond 40 in a workweek, calculated at 1.5 times their regular hourly rate. Here are the latest changes to overtime eligibility in 2025: 

1. Updated Salary Threshold for Exempt Employees 
   • The Department of Labor (DOL) has proposed an increase in the salary threshold for exempt employees. This update affects the earnings level below which workers automatically qualify for overtime pay, even if they perform managerial or professional duties. 
   • Review the salaries of exempt employees to confirm that they meet or exceed the new threshold. Employees below this threshold will need to be reclassified as non-exempt, meaning they’ll be entitled to overtime pay. 
2. Classification of Employees 

• • Misclassification of employees as exempt when they should be non-exempt can result in penalties and backpay obligations. To ensure compliance, evaluate job descriptions and duties for each role to determine correct classification. SolveHR can assist in conducting a compliance review of job classifications and salary structures to keep your business aligned with FLSA standards.
    

Essential Steps for FLSA Compliance in 2025 

Ensuring compliance with FLSA standards requires proactive policies and attention to detail. Here’s how employers can keep their payroll practices up to date: 

1. Conduct a Wage and Hour Audit 
   • A wage and hour audit can help identify any discrepancies in your payroll practices, ensuring that employees are accurately classified as exempt or non-exempt and that minimum wage requirements are being met in all locations. 
   • This audit should include a review of timekeeping practices to ensure accurate tracking of hours worked, especially for non-exempt employees who qualify for overtime. 
2. Regularly Review Job Descriptions 
   • Job duties should align with FLSA classifications. Review and update job descriptions regularly, particularly for roles close to the exemption threshold, to avoid misclassification issues. 
3. Ensure Accurate Timekeeping 
   • Accurate timekeeping systems are essential for tracking hours and calculating overtime pay correctly. Invest in a reliable system that allows employees to log hours accurately and allows for overtime calculation in compliance with the FLSA. 
4. Train Managers on FLSA Compliance 
   • Many FLSA violations stem from misunderstandings at the managerial level. Training managers on wage and hour laws, proper classification, and overtime policies can reduce the risk of unintentional violations. 
5. Stay Updated on State and Local Laws 
   • State and local wage laws often change mid-year. Regularly review minimum wage and overtime laws in every location where you have employees, as local changes may impact compliance.
     

SolveHR: Your Partner for FLSA Compliance 

At SolveHR, we understand the complexities of FLSA compliance and the challenges of managing payroll across multiple locations. As a PEO, we help businesses conduct regular wage and hour audits, implement accurate timekeeping systems, and provide training to ensure compliance with FLSA standards. Our HR experts stay current on all employment law changes, so you can focus on what matters most—running your business. 

FLSA compliance is essential to protect your business and foster a fair workplace. By keeping up with minimum wage increases, overtime eligibility changes, and employee classification rules, you can stay compliant and create a positive, lawful work environment. If you need help with FLSA compliance, contact SolveHR today. Our team is here to simplify the process, so you can be confident that your business is up to date with all 2025 regulations.