An exempt employee is excluded from the minimum wage
and overtime provisions of the Fair Labor Standards Act (FLSA). A non-exempt
employee is one who must be paid at least minimum wage for all hours worked
and overtime pay at the rate of time and one-half their regular rate for all
hours worked over 40 per week. State laws may be more stringent.
Generally, non-exempt employees' work is
routine with set standards and rules. The position generally does not
require independent judgment. Typical examples of non-exempt positions
include: bank teller, bookkeeper, secretary, and shipping/receiving clerk.
Generally, exempt employees exercise
independent discretion in their positions and do not spend more than 20
percent of each workweek performing duties that are not related to their
exempt duties.
The FLSA offers two independent tests
which may be applied to determine if a position meets the executive,
administrative, or professional exemptions -- the Long Test and the Short
Test. If the duties of the position meet the requirements of either test,
the employee is considered exempt from the minimum wage and overtime
standards of the FLSA.
Finally, when using your job description
to determine exempt or non-exempt status, be aware of state wage laws that
may be more beneficial to the employee. An employee must be exempt under
both state and federal law to avoid paying overtime.
The following identifies the requirements
of the "Short Test" or "Streamlined Test" for exemption
of certain types of employees:
EXECUTIVE
Short test for high salaried employees:
ADMINISTRATIVE
Short test for high salaried employees:
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primary duty is performing office or
non-manual work directly related to management policies or general
business operations of employer or its customers, administrative work in
the academic field, or work relating to academic instruction; and
PROFESSIONAL
Short test for high salaried employees:
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