The Department of Labor’s Fair Labor Standards Act (FLSA) regulates the hourly wages and overtime eligibility of U.S. employees. The FLSA is not the only legislative authority for workers; there are other acts that govern specific industries such as the Motor Carriers Act for truck drivers and the Railway Labor Act for railroad workers. If your job is covered by the FLSA then you are either exempt, and cannot receive overtime wages, or nonexempt, and are eligible for overtime wages.
There are three tests that determine exempt status for an employee. If a worker “passes” each of these three tests, then generally they will not be eligible for overtime wages. In summary, the FLSA outlines these three determinants as salary level, salary basis and duties. Under salary level, an employee that is paid less than $455 a week, or $23,600 annually, is nonexempt. Salary basis determines if the employee will receive a said amount of money weekly – an amount that can be counted on – based on the various tasks completed for that week. Third, the type of duties performed by the employee are examined. Someone meeting all three of these tests is considered exempt from overtime wages.
The type of work that one performs is taken into consideration when determining overtime eligibility status. The FLSA has labeled job duties that are executive, professional and administrative as exempt from overtime wages. Executive jobs are supervisory in nature. These jobs have management as the main focus and see the employee focused on hiring, firing, training and overall guidance of his or her subordinates. Professional jobs are those that require higher levels of education, some even beyond traditional four-year college. Professional workers perform tasks that involve a greater degree of schooling and training. Some examples of professional employees are doctors, lawyers, and engineers. However, actors, directors, and musicians are often considered as performing professional job duties. Administrative workers are those that often assist the professionals and executives. Their work is not considered to be in the production realm of an organization, rather in the support of those that govern or produce. The administrative realm is diverse and some people working in this field may be considered exempt for the type of administration they are performing, such as assisting the CEO of a company, while others may be performing mainly clerical work that is classified as nonexempt.
In August of 2004 changes to the FLSA went into effect. In essence, the specifics of one’s job requirements, as outlined above under job duties, were the focus of these changes. Determining the exempt or nonexempt status of employees is important. Many companies have faced lawsuits for unpaid overtime wages for employees that they classified previously as exempt but who turned out to actually be nonexempt.
For more information regarding the FLSA and exempt and nonexempt status, go to: DOL.GOV/WHD/FLSA
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Tags: DOL, employees, exempt employee, Fair Labor Standards Act (FLSA), HR, non-exempt employee
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