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:
primary duty is managing an enterprise, department,
or subdivision
customarily directs work of two or more employees
has some responsibility
for hiring, firing and/or advancement of employees
ADMINISTRATIVE
Short test for high salaried employees:
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:
For a more detailed discussion
of the requirements or more classes of specialized employees, please visit
the Department of
Labor website for the Fair Labor Standards Act..
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