FLSA Exempt and Nonexempt Defined

By hrlineup | 17.12.2019

The Fair Labor Standards Act, best known as FLSA is the law that determines exempt or nonexempt status of jobs and overtime requirements. This is the law that covers minimum wage, overtime pay, hours worked, record keeping, and youth employment standards for all employees in the private sector as well as in the federal, state, and local governments. FLSA is usually administered by the Wage and Hour Division of the Department of Labor (DOL). Employers must be fully aware of both overtime rules for non-exempt employees and overtime rules for exempt employees to remain compliant.

Overtime

Overtime basically means any extra time that you work after 40 hours a week on one or more jobs. Every employee has to work for the allocated work time, and this is usually the time scheduled for one to be on work duty including the time spent on authorized paid leaves of absence such as vacation leave, sick leave, comp time off and paid military leave among others. When it comes to overtime, there are both exempt and nonexempt employees and there are hr compliance requirements.

Exempt employees are those whose jobs do not offer any overtime provisions as per the Fair Labor Standards Act. FLSA nonexempt   employees on the other hand are those that work in jobs that are subject to overtime provisions and overtime pay is required. Nonexempt employees can also get some time off instead of getting an overtime pay.

There are many bodies and legislations that regulate overtime pay, just to be sure that employees are well compensated:

  • The Federal Fair Labor Standards Act, FLSA
  • The Minnesota Fair Labor Standards Act, MFLSA
  • Civil Service rules
  • Collective bargaining agreements

For employers to ensure that they are flsa compliance, they need to determine if a certain job is exempt or nonexempt. There are certain exemption tests that FLSA uses, namely:

  • Executive test: jobs qualifying for exemption under this test must have managerial responsibilities and these include business executives.
  • Administrative test: those that qualify for exemption under this test are those in the administrative division.
  • Professional test: employees exempted from overtime pay under this test are those that perform work that require advanced knowledge
  • Outside sales test: exempt employees under this test are those that are regularly engaged away from the employer’s place or places of business.
  • Computer test: employees working as computer systems analysts, computer programmers, software engineers, or other similarly skilled workers in the computer field also enjoy flsa exempt.

All jobs are considered nonexempt but an employer can complete an exemption test to document why overtime is not necessary for a certain job or jobs. According to FLSA law, employers who earn at least $455 a week can be exempted from overtime rules under all the above mentioned tests. An employee could also be exempted from overtime if they are earning more than over $100,000 a year.

HR managers are responsible for establishing and administering policies and procedures that will help a business comply with the set FLSA standards. They should be able to determine which jobs within the business are exempt and those that are nonexempt from overtime pay.

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