Are you the type of employee that is entitled to overtime pay?
Q. Could you explain the two categories, or types of employees?
A. There are two different categories of employees – those who are exempt from the laws on overtime pay and those who are non-exempt. There are very specific exemptions under the FLSA and employees whose job does not require the duties that fit into those exemptions to be fulfilled are non-exempt employees.
The exemptions provided for under the Fair Labor Standards Act are very limited and narrow, and the burden is placed on the employer to prove that any given employee or class of employees is not exempt.
There is no denying that exemption issues are complicated, but we have provided a general overview of the tests that developed by the Department of Labor:
Executive Exemption
If you think you may be qualified for an executive employee exemption, you must pass all of the tests below:
At a rate more than $455 per week, the employee must be paid on a salary basis, which meets the requirements under the Fair Labor Standards Act.
The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
An employee must have the ability to hire or fire other employees, or they have to have a particular involvement in the process of hiring or firing employees. If their suggestions have no weight in that process, they are not qualified for an executive employee exemption.
Administrative Exemption
If you believe you may qualify for an administrative employee exemption, you can find out by checking if the tests below are met:
An employee must be paid on a salary or fee basis – in accordance with the FLSA;
The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
The primary duty of the employee must involve the practice of discretion and independent judgment, involving matters of significance.
Professional Exemption
For the learned professional employee exemption to apply , the following tests must be met;
The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The workers main duty has to be work that requires advanced knowledge which is mostly intellectual in nature. It must also require an employee to use discretion and judgment on a routine basis;
The advanced knowledge must come from the field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
If you believe you may qualify for the creative professional employee exemption, you must meet the following tests:
The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
An employee’s main duty has to be performing work that requires imagination, invention, originality or talent in a particularly artistic or creative endeavor.
Computer Employee Exemption
The type of employees that receive the computer employee exemption must meet the following tests:
The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
An employee has to be hired as a computer programmer, computer systems analyst, software engineer, or other similarly skilled work in the computer field who performs the duties listed below;
The employee’s main responsibility must consist of:
1) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
2) The creation, development, analysis, creation, testing, documentation, or modification of computer systems or programs, which could include prototypes, that or related to or based on system design specifics.
3) The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
4) A combination of duties listed above, the performance of which will require the same level of skills.
Outside Sales Exemption
The type of employees that qualify for the outside sales employee exemption must meet the following tests:
The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
The main duty of the employee must be making sales (as defined by the FLSA), or working on gathering orders or contracts for services or the use of facilities for which a client or customer will pay for; and It must be common place (customary and regular) for an employee to be away from the employer’s location(s) for sales related work.
Highly Compensated Employees
If highly compensated employees perform office work or non-manual labor and the compensation exceeds $100,000, (which includes more than $455 in weekly salary), they are exempt from the FLSA if they regularly fulfill at least one of the duties which must be customarily performed by an exempt executive, professional or administrative employee indentified in the standard tests for exemptions that are listed above.
Blue Collar Workers
Exemptions for “white collar” workers are quite different from those that are applied to “blue collar” or manual workers who perform tasks that involve frequent operation with their hands, physical skills and energy. Blue collar workers in production, maintenance, construction or similar occupations like carpenters, plumbers, electricians, mechanics and other laborers are entitled to minimum wage and overtime pay under the FLSA. No matter how highly these workers are paid, they are not exempt.
Collective Bargaining Agreements
The Fair Labor Standards Act provides a list of standards that are the minimum, which may be exceeded, but cannot be reduced or waived completely. It is up to the employer to decide if they want under their own initiative or collective bargain agreement agree to provide a higher wage, shorter workweek, or a premium higher than the one provided under the FLSA.
