The Fair Labor Standards Act of 1938 (FLSA), or the Wages and Hours bill, includes employment protection provisions such as overtime pay for employees. However, overtime pay and required minimum wages are provided only to employees that work more than 40 hours in a workweek and that are not an “exempt employee” for purposes of this law.
The Importance in Distinguishing Between an Exempt Employee and a Non-Exempt Employee with Employment Benefits and Wages
Certain employers must classify each employee as exempt or non-exempt for wages and benefits requirements under the FSLA. Exempt employees are not protected by the FSLA requirements for overtime pay or minimum wages.
Non-exempt employees are required to receive overtime pay and minimum wage per FSLA regulations. Understanding the difference can be very important, especially if the employer does not properly classify its employees to skirt the additional costs per hour worked by some of its employees.
Definition of an Exempt Employee versus a Non-Exempt Employee under FSLA
Non-Exempt Employees
Non-exempt employees include most of the workforce and generally will include hourly employees. FLSA requires employers subject to its requirements to pay non-exempt employees minimum wages and overtime pay equal to one and a half times the employees’ regular pay rate for hours worked overtime.
This means additional payment for the hours worked over 40 hours. For example, if a non-exempt employee works 45 hours in a standard workweek, then generally that employee would be entitled to 40 hours of regular pay and 5 hours of overtime pay.
Exempt Employees
Exempt employees, on the other hand, do not receive overtime pay under the FLSA requirements. For an employer to classify an employee as an exempt employee, certain requirements must be met, including:
(1) the employee must be paid at least $23,600 per year or $455 per week, and
(2) receive payment on a salary basis, with some exceptions for hourly professions such as schoolteachers and physicians.
Job Duties
There is an additional requirement to fall under the definition of an exempt employee for purposes of FLSA. This requirement focuses on the job duties performed. Typically, the job duties specification is broken down into three types of categories.
Executives and Management Roles
One group of exempt employees include persons managing others or serving in executive-level roles within the company. Their primary job duty should be managing other employees and they should have supervisory responsibilities over at least two other employees.
Additionally, this group of exempt employees usually must have some input into the employment status, such as hiring, termination, pay, or project assignments, of other employees at the employer.
Since this will depend on the company, it not a clear distinction. As such, it will depend on the circumstances.
Professionals
Generally, professionals that are considered exempt employees include those that need some type of specialized skill, degree, education, or training to perform their job duties. For example, lawyers, architects, and doctors are frequently included. However, while these are some of the examples of those more commonly recognized as exempt employees, there are other professions that may fall into this category.
Creative Professionals
Writers, creative specialists and marketers, actors, and other creative professionals that offer a key unique skill to the employer may also qualify as an exempt employee in the professionals’ sub-category.
Administrative Supporting Key Functions
This type of exempt employee is performing administrative job duties beyond clerical work. Rather, these employees usually have duties that are essential to supporting the business’ operations such as positions within departments including accounting, payroll, and human resources.
If the duties performed within these departments are mainly clinical, however, and did not require specific training, then the employee may instead be a non-exempt employee.
Employers That Fall Under the FSLA Requirements
There is an added complication that you should know if you are wondering whether or not you are an exempt employee.
Do you work at an organization covered by the requirements of the FSLA?
Even if you are a non-exempt employee, FSLA only provides this overtime and minimum wage law protections to employees at government agencies (federal, state, or local), schools, hospitals, or companies with at least $500,000 in annual revenue.
Employment Laws Apart from the FSLA are a Potential Option
If you work for some other type of organization, or if you are exempt, there may be other laws based on your locality or the type of work you perform. These may offer you a means for overtime payment protection to employees of other organizations.
It is best to consult with an employment law attorney if you are unsure of whether you are entitled to overtime pay under federal law pursuant to FSLA if you are unsure.
Mislabeling Employee Titles, Roles, and Job Duties to Avoid Federal Employment Overtime Payment Laws
Some employers have attempted to avoid overtime payment requirements by classifying an employee’s job title or duties with the intent to have that employee declared an exempt employee so as to avoid additional payment when that employee works over 40 hours in a workweek.
This is a serious violation, but one that is complicated to address. If you suspect you may be in this position, you should consider consulting an expert soon.
Do You Need Help With an Employment Law Claim on Overtime Pay or Minimum Wage? Speak with An Experienced Lawyer
Time is important in seeking remedies for employment law claims, it is a good idea to find out your rights prior to raising red flags that you may have suspicions with your employer. The best idea is to seek out a consultation from an experienced employment and labor law attorney to understand your status and rights regarding proper compensation.
Contact Swartz Legal
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