Exempt employee overtime The DOL has established guidelines to determine who is eligible for overtime pay. Salary vs. Salaried non-exempt employees Employers should not automatically assume that employees can properly be considered exempt under the FLSA just because they earn a salary.
Hourly exempt employees Some industries may have hourly employees who are exempt from overtime pay. The more notable examples include the agriculture, movie theater and railroad businesses Employee classification Failure to properly distinguish exempt from non-exempt employees, sometimes referred to as misclassification, can adversely affect businesses. Misclassification may result in: Regulatory enforcement action Fines and penalties Employee lawsuits for unpaid overtime Costs to remedy misclassification Sometimes reclassification is necessary, but this too comes with risks.
FAQ How do you classify employees? Download now. Read now. FAQ 5 most common HR compliance fines. Learn more. Get pricing specific to your business. Are you a current ADP client? She spends most of Friday night tweaking it and finishing it up, staying at the office until late.
On Monday, she gets her paycheck -- the same amount of money she would've gotten if she hadn't stayed late. Meanwhile, John, who is a non-exempt employee, chooses to take extra shifts and work overtime on Friday's. He doesn't have to -- he could leave at 5 p. They are expected to finish tasks required of their role, whether it takes 30 hours or Non-exempt employees must be paid overtime and are protected by FLSA regulations. They can be paid salary or hourly wage, but must be given federal minimum wage.
Originally published Oct 19, AM, updated October 19 Logo - Full Color. Contact Sales. Overview of all products. Marketing Hub Marketing automation software. Service Hub Customer service software. Salary basis test. However, whether an employee is paid on a salary basis is a "fact," and thus specific evaluation of particular circumstances is necessary. The FLSA salary basis test applies only to reductions in monetary amounts. Requiring an employee to charge absences from work to leave accruals is not a reduction in "pay," because the monetary amount of the employee's paycheck remains the same.
Similarly, paying an employee more than the guaranteed salary amount is not normally inconsistent with salary basis status, because this does not result in any reduction in the base pay.
With some exceptions, the base pay of a salary basis employee may not be reduced based on the "quality or quantity" of work performed provided that the employee does "some" work in the work period.
For example, a salary basis pay employee's base pay may not be reduced if there is "no work" to be performed such as for a plant closing or slow period , and a salary basis employee's base pay may not be reduced for partial day absences. However, employers may "dock" the base pay of salary basis employees in full day increments, for disciplinary suspensions, or for personal leave, or for sickness under a bona fide sick leave plan as for example if the employee has run out of accrued sick leave.
Thus, there can be "permissible" and "impermissible" reductions in salary basis pay. Permissible reductions have no effect on the employee's exempt status. Impermissible reductions may, in that the general rule is that an employee who is subjected to impermissible reductions in salary is no longer paid on a salary basis, and is therefore nonexempt.
However, employers have several avenues by which they can "cure" impermissible reductions in salary basis pay, and as a practical matter these make it unlikely that an otherwise exempt employee would become nonexempt because of salary basis pay problems. The salary basis pay requirement for exempt status does not apply to some jobs for example, doctors, lawyers and schoolteachers are exempt even if the employees are paid hourly.
These FLSA exemptions are limited to employees who perform relatively high-level work. Whether the duties of a particular job qualify as exempt depends on what they are. Job titles or position descriptions are of limited usefulness in this determination. It is the actual job tasks that must be evaluated, along with how the particular job tasks "fit" into the employer's overall operations. There are three typical categories of exempt job duties, called "executive," "professional," and "administrative.
Exempt executive job duties. Job duties are exempt executive job duties if the employee. Supervision means what it implies. The supervision must be a regular part of the employee's job, and must be of other employees. Supervision of non-employees does not meet the standard.
The "two employees" requirement may be met by supervising two full-time employees or the equivalent number of part-time employees. Two half-time employees equal one full-time employee. In addition, the supervisory employee must have "management" as the "primary duty" of the job. These include in addition to supervision :. Hourly : An individual who receives an hourly wage for work performed.
Generally, such individuals, because of the method of payment, are classified as nonexempt and are subject to the overtime provisions of the FLSA. Exempt computer professionals may also be paid on an hourly basis, as could those exempt under the professional exemption, such as teachers, lawyers, doctors, and still retain their exempt status.
People Manager Overtime Eligibility and Exemptions. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark. Delete Cancel. You have successfully removed bookmark. Delete canceled.
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