It is up to employers to determine whether to classify an employee as exempt or nonexempt under the Fair Labor Standards Act (FLSA). The key considerations of this classification are exempt workers are not eligible for overtime pay rather they are paid for the job they do, not the hours they worked. Nonexempt employees are covered by the FLSA’s minimum wage and overtime pay laws. An employee who is paid on an hourly basis is usually considered to be nonexempt, regardless of the hourly rate paid. Employees commonly classified as nonexempt include clerical, maintenance, construction, mechanics, and semiskilled workers, as well as technicians and laborers. To ensure compliance with the FLSA, employers need to regularly review their employee classifications.
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- Does the employee customarily direct the work of two or more other employees or their equivalent?
- Does the employee have the authority to hire or fire, and do their recommendations carry significant weight if unauthorized to make the final decision?
- Is the employee paid the equivalent of at least $455 per week on a salary basis?
Answering “no” to any of the above questions may lead to a misclassification of an executive employee as exempt. For an administrative employee to be classified as exempt the must be able to answer “yes” to the following questions:
- Is the employee’s primary duty performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers?
- Does the employee exercise discretion and independent judgement with respect to matters of significance? That is do they evaluate and compare possible courses of action and then make a decision or recommendation after considering the various possibilities?
- Is the employee paid the equivalent of at least $455 per week on a salary …show more content…
Answering “no” to any of the above questions may lead to a misclassification of an outside sales employee as exempt. Again, the FLSA exempts broad categories of white-collar jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities and are paid a certain minimum salary of at least $455.
The primary advantages of classifying employees as exempt are that the employer does not have to track their hours or pay them overtime, no matter how many hours they worked. However, exemptions from the overtime requirements of the FLSA are just that- exceptions to the rule. As the employer, you will always bear the burden of providing that you have correctly classified an employee as exempt. Other issues to consider with exempt and nonexempt classifications is comp time, child labor, and breaks. With comp time, although there are exclusions, it is typically illegal to give nonexempt employees comp time instead of paying them overtime. Federal and state laws include special provisions to protect workers younger than 18. These laws can affect the type of work, wages, and hours that an employee can work. Employers need to make sure they follow federal and state law requirements regarding breaks, including meal breaks for
- Does the employee customarily direct the work of two or more other employees or their equivalent?
- Does the employee have the authority to hire or fire, and do their recommendations carry significant weight if unauthorized to make the final decision?
- Is the employee paid the equivalent of at least $455 per week on a salary basis?
Answering “no” to any of the above questions may lead to a misclassification of an executive employee as exempt. For an administrative employee to be classified as exempt the must be able to answer “yes” to the following questions:
- Is the employee’s primary duty performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers?
- Does the employee exercise discretion and independent judgement with respect to matters of significance? That is do they evaluate and compare possible courses of action and then make a decision or recommendation after considering the various possibilities?
- Is the employee paid the equivalent of at least $455 per week on a salary …show more content…
Answering “no” to any of the above questions may lead to a misclassification of an outside sales employee as exempt. Again, the FLSA exempts broad categories of white-collar jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities and are paid a certain minimum salary of at least $455.
The primary advantages of classifying employees as exempt are that the employer does not have to track their hours or pay them overtime, no matter how many hours they worked. However, exemptions from the overtime requirements of the FLSA are just that- exceptions to the rule. As the employer, you will always bear the burden of providing that you have correctly classified an employee as exempt. Other issues to consider with exempt and nonexempt classifications is comp time, child labor, and breaks. With comp time, although there are exclusions, it is typically illegal to give nonexempt employees comp time instead of paying them overtime. Federal and state laws include special provisions to protect workers younger than 18. These laws can affect the type of work, wages, and hours that an employee can work. Employers need to make sure they follow federal and state law requirements regarding breaks, including meal breaks for