Under the Fair Labor Standards Act, employers must pay most employees at or above the minimum wage and overtime pay for all hours worked over 40 hours during a workweek. The overtime rate of pay must be at least one and one-half times the regular rate of pay. Employees that must be paid overtime are referred to as nonexempt employees, while those employees that are not entitled to overtime are exempt employees. Unfortunately, many employees do not know if they are exempt or nonexempt, and that may result in some employees not being paid for overtime work.
Some jobs are specifically excluded from the Fair Labor Standards Act, like many types of agricultural workers, and other professions, like truck drivers, are governed by other laws. However, the majority of U.S. workers are covered by the Fair Labor Standards Act's overtime protections. Unless you fit into one of the exempt categories, you are a non-exempt employee and are entitled to both the minimum wage and overtime pay. In order to be considered exempt for the purposes of the Fair Labor Standards Act, the employee must make a salary greater than $455 per week and meet one of the following requirements:
Bona Fide Executive
A bona fide executive must manage the whole business or a major part of the business, including supervising and directing at least two full-time employees. In addition, the bona fide executive must have the authority to hire and fire employees, or at least have their recommendations for hiring and firing be given particular weight.
Administrative Employee
The administrative exemption covers employees that primarily perform office or other non-manual labor related to the management or operation of the business. Importantly, the administrative employee must use discretion and independent judgment when working.
Learned Professional
A learned professional performs work that requires advanced knowledge of science or learning acquired by attending educational instruction.
Creative Professional
A creative professional performs work requiring invention, imagination, originality, or talent in a recognized field requiring artistic ability or creativity.
Highly Compensate Employee
Any employee that earns more than $100,000 per year and only performs office or other non-manual work is exempt, as long as they also perform at least one of the duties of an exempt executive, administrative or professional employee.
Computer or IT Employee
If an employee is skilled in the computer field performing the application of systems analysis techniques and procedures, or designing, analyzing, creating, documenting, modifying or testing computer systems, machine operating systems or programs.
Outside Sales Employee
An employee is exempt when the employee's primary duty is making sales or obtaining contracts or orders for services. In addition, the employee must be regularly working away from the employer's primary place of business.
It is extremely important that an employee is aware of his or her status under the Fair Labor Standards Act. Some employers accidentally or intentionally misclassify their employees, in order to limit costs. Misclassifying employees allows an employer to require employees to work more than 40 hours per week without paying overtime.
