Vacation, holidays or sick days should not be included when performing these calculations unless the employee worked on those days. The DOL has established guidelines to determine who is eligible for overtime pay. For instance, employers who have hourly workers must track time and attendance to ensure payroll accuracy. Employers should not automatically assume that employees can properly be considered exempt under the FLSA just because they earn a salary. Some industries may have hourly employees who are exempt from overtime pay.
The more notable examples include the agriculture, movie theater and railroad businesses. Failure to properly distinguish exempt from non-exempt employees, sometimes referred to as misclassification, can adversely affect businesses. Misclassification may result in:. Sometimes reclassification is necessary, but this too comes with risks. For example, a non-exempt employee who is reclassified as exempt may resent no longer receiving overtime wages, while an exempt employee who is reclassified as non-exempt may perceive the change as a reduction in prestige.
This type of open communication can help prevent reduced morale. Employers are free to create work schedules for exempt employees however they see fit as long as they comply with any state and local regulations that govern meals and breaks. Exempt employees are required to meet certain DOL job criteria known as the duties test. Exclusions from FLSA coverage. Particular jobs may be completely excluded from coverage under the FLSA overtime rules. There are two general types of complete exclusion.
Some jobs are specifically excluded in the statute itself. For example, employees of movie theaters and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs which are governed by some other specific federal labor law. As a general rule, if a job is governed by some other federal labor law, the FLSA does not apply.
Employees whose jobs are governed by the FLSA are either "exempt" or "nonexempt. Exempt employees are not. Most employees covered by the FLSA are nonexempt. Some jobs are classified as exempt by definition. For example, "outside sales" employees are exempt "inside sales" employeesare nonexempt.
For most employees, however, whether they are exempt or nonexempt depends on a how much they are paid, b how they are paid, and c what kind of work they do.
Department of Labor. Most employees must meet all three "tests" to be exempt. Salary level test. 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. It all depends on your areas of interest and preferred lifestyle. For example, hourly workers receive set shifts along with hourly pay that increases to time and a half as soon as they surpass 40 working hours during the week.
However, hourly workers might not receive benefits such as health insurance or be able to take extensive vacations, and they may have to work nights or weekends. In contrast, salaried employees tend to make more money than hourly workers. They often receive paid time off along with a set number of vacation days and other benefits, including insurance and k packages. However, the nature of their job might require them to work overtime with no additional pay. Certain salaried professions can potentially be offered overtime pay.
Nurses and emergency service workers are good examples of this exception, as they are often allowed overtime pay to compensate for long hours, shift work and high-stress work environments. Please note that we are not your career or legal advisor, and none of the information provided herein guarantees a job offer. Post a job. Find resumes. Help Center. Find Jobs. If an employee is considered exempt vs. Some employers might create an employee benefits package with extra perks in lieu of overtime pay.
If you are consistently asked to work overtime , you may be able to negotiate a raise. To complicate matters further for employers, there are additional federal, state, and FLSA laws related to other classifications of workers, such as interns, independent contractors, temporary employees, volunteers, workers-in-training, and foreign workers that employers are required to abide by.
A non-exempt employee is entitled to overtime pay through the Fair Labor Standards Act. Also, some states have expanded overtime pay guidelines. Check with your state department of labor website for rules in your location. The Fair Labor Standards Act recognizes the following main categories of exempt workers:. These categories are purposefully broad to encompass many types of jobs. It is the tasks performed on the job, not the job title alone, that determine exempt vs.
The FLSA guarantees non-exempt employees one and one-half times their normal pay rate for overtime worked during a given work period. Also, to qualify for exemption from overtime , employees must also meet certain employment tests regarding their job duties and responsibilities. The following general conditions must be met to designate an employee as exempt:.
The following changes are in effect as of January 1, Not all states have the same guidelines for exempt employees.
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