Overtime Violations and Exemptions
The Fair Labor Standards Act ("FLSA") establishes, among other things, the federal minimum wage and regulates employee overtime status, overtime payment, and record keeping requirements. Under the FLSA employers must generally pay employees overtime ("a rate not less than time and one-half their regular rates of pay") if they work more than 40 hours a week. But, not all employees are eligible for overtime pay. There are several types of jobs that are exempt from receiving overtime pay under the FLSA, including those that fall into one of five categories: administrative employees, computer employees, executives, outside sales personnel, and professional employees.
1. Administrative overtime exemption - In administrative roles, employees exercise independent judgment and display a high level of confidentiality. The duties associated with these roles typically involve the performance of office work (that is, non-manual work) that is directly related to the management or general business operations of the business or its customers. Their main job duties include having the authority to exercise independent judgment on significant business matters. Some factors a court will consider include how much authority the employee has regarding daily business operations and running the company, whether the employee expected to concept, create, and execute operations policies and whether the employee has the authority to make decisions. These pertain to the employee having a certain level of autonomy to make decisions on behalf of the company.
In these roles, the employee must meet the requirements just mentioned and earn a salary or fee of at least $684.00 a week (appx. 36K per year) to be overtime exempt under the FLSA.
2. Computer employee overtime exemption
Computer roles are often exempt from overtime pay. This particular FLSA overtime exemption typically applies to employees with great knowledge and experience in the computer field, such as programmers, systems analysts, software architects, software engineers, other employees with similar skills in the computer field
According to the Department of Labor, the employee's primary duties should include:
The application of systems analysis techniques and procedures — including consulting with users — to determine hardware, software, or system functional specifications.
The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications.
The design, documentation, testing, creation, or modification of computer programs related to machine operating systems.
A combination of the aforementioned duties, the performance of which requires the same level of skills.
The computer employee exemption does not include manual or physical labor such as manufacturing or repairing computer hardware and related equipment.
For employees to be overtime exempt in these roles, they must earn a salary of at least $684.00 a week gross pay, or, if compensated on an hourly basis, at a rate not less than $27.63 an hour.
3. Executive overtime exemption
Executive roles are responsible for managing the business, a department of the company, or a particular branch of the business.
They must also be in a position to hire or fire other employees, or their recommendations for other employees' advancement, firing, hiring, or promotions must be given weight. Their roles often direct the work of at least two or more full-time employees.
In these roles, the executive employee must meet the requirements just mentioned and earn a salary of at least $684.00 a week in order to be overtime exempt.
4. Outside sales overtime exemption
To qualify for the outside sales exemption, an employee must either regularly or customarily work away from the employer's place of business and the employee's primary duty must be one of the following:
Making sales
Obtaining orders/contracts for services or facility use
In these roles, the minimum weekly salary requirement doesn't apply.
5. Professional overtime exemption
This exemption falls into one of two categories: learned professionals and creative professionals. And like many of the other exemptions, there is the requirement of $684.00 a week to qualify for this exemption.
In the case of learned professionals, the employee's work must require "knowledge of an advanced type," typically in a field of learning or science that the employee acquires by specialized instruction. In many cases, the work is characterized as intellectual in nature and requires the exercise of discretion and judgment. Examples may include: Accountants, Actuaries, Architects, Scientists, Doctors, Engineers, Lawyers, and Professors.
Alternatively, the primary duties of career creative professionals include work that requires imagination, invention, or talent in a recognized artistic or creative field. Examples may include: Actors, Artists, Composers, Graphic designers, Musicians and Composers, and Writers (essayists, novelists, etc.)
Determining which employees are overtime exempt under the FLSA, and which are not, can be time-consuming and complex. Indeed, the information above is merely a small portion of what employers and employees need to know about FLSA exemptions and overtime law.
Contact us if you have not received all the overtime compensation you believe you are entitled to under the law.