The Fair Labor Standards Act (FLSA) establishes wage standards for employees in the private sector as well as those working for federal, state, or local government. Under the Act, employees must receive overtime pay for any hours worked over the standard 40- hour work week. Certain employees are exempt from the FLSA rules for overtime, and employers must know which employees are exempt and non-exempt. Employment misclassification can become costly in unpaid overtime and penalties.
Who is Exempt?
The rules seem simple, but there are many different exemptions each with its own set of requirements. Agricultural workers and truck drivers are two examples of jobs that have their own exemptions. Generally however, most businesses are dealing with “white collar exemptions”, which refer to jobs that can be categorized as either executive, administrative, or professional.
A worker in one of these categories must satisfy both salary and duty requirements to be exempt from the FLSA overtime rules. Titles, such as manager, or salary do not make an employee automatically exempt. The employee must be paid on a salary basis at a minimum of $455 per week. Any employee paid on an hourly basis or commission only system does not satisfy the salary requirement for white collar exemptions.
The duties requirement is different for each category of white collar exemption, and are as follows:
- Primary duties must involve managing the business or department
- Must supervise two or more full-time employees
- Must have the authority to hire and terminate employees
- Primary duties must be non-manual and directly pertain to the management or business operations of the company
- Must regularly exercise judgment and discretion in matters of importance
- Primary duties must be work of a largely intellectual kind and require the regular exercise of discretion and judgement in matters of importance
- Must work in one of the sciences or other field of learning (architecture, medicine, engineering, teaching, law, accounting, science, or similar field)
- Knowledge of the job must have been gained through a prolonged course of intellectual study (a specialized or advanced degree)
High level managerial employees often meet the criteria for the executive exemption while many registered nurses, engineers, pharmacists, and physician’s assistants qualify for the professional exemption. The administrative exemption is perhaps the most difficult to categorize correctly and is commonly misapplied to employees who do not meet the duties requirement.
It is important for employers to consider more than just an employee’s title when classifying them as exempt or non-exempt. If the employee’s status is in question, then the guidance of qualified legal counsel is imperative to avoid costly mistakes, especially if there are several employees in the same position.
Marlton Employment Lawyers at McOmber McOmber & Luber, P.C. Provide Experienced Counsel in Matters of Employment Law
For all your questions about FLSA classification, speak to a skilled Marlton employment lawyer at McOmber McOmber & Luber, P.C.. We have the knowledge you need regarding any issue related to employment law. Call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online for a free consultation today.