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FLSA Exemptions: How to Identify Exempt Employees

This quick reference guide discusses how to distinguish between exempt and non-exempt employees under FMLA.

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FLSA Exemptions: How to Identify Exempt Employees

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  1. FLSA Exemptions: How to Identify Exempt Employees

  2. What is FLSA? Fair Labor Standards Act (FLSA) : • Sets standards for minimum wage and overtime pay. • Establishes record keeping standards. • Prescribes child labor standards. FLSA does not regulate: • vacation, holiday, severance, or sick pay. • meal or rest periods, holidays off, or vacations. • premium pay for weekend or holiday work. • pay raises or fringe benefits. • discharge, termination, or final payment procedures.

  3. Exempt and Non-exempt Employees • Exempt employees- Employees who meet one of the FLSA exemption tests and who are paid on fixed salary basis, not entitled to overtime. • Non-exempt employees- Employees who do not meet any of the FLSA exemption tests and are paid on hourly basis and are covered by wage and hour laws regarding minimum wage, overtime pay and hours worked.

  4. Test for Exemption To qualify for exemption, employees must meet certain tests regarding their: • Salary Level: • minimum salary level required for exemption is $455 per week • Job Duties- Categories of Exemption: • Executive Employees • Administrative Employees • Professional Employees • Outside Sales Employees • Computer Employees

  5. Test for Exemption-Job Duties

  6. Independent Contractors FLSA does not cover independent contractors. Therefore, its important to learn to distinguish between an independent contractor and an employee. The Supreme Court considers the following factors significant in determining an employee’s role versus that of an independent contractor: • the extent to which the worker's services are an integral part of the employer's business. • the permanency of the relationship. • the amount of the worker's investment in facilities and equipment. • the nature and degree of control by the principal. • the worker's opportunities for profit and loss. • the level of skill required in performing the job and the amount of initiative, judgment, or foresight in open market competition with others required for the success of the enterprise.

  7. Want to learn more about FLSA, its requirements and best practices to comply with them? ComplianceOnline webinars and seminars are a great training resource. Check out the following links: • Fair Labor Standards Act: Are Your Employees Classified Correctly? • The In's and Out's of FLSA • How to Conduct FLSA Classification Self-Audit • Avoiding Costly Wage and Hour Problems • How to Pay Overtime Correctly under FLSA • Handling Supplemental Pay Under the FLSA

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