However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. To qualify for an exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than prevailing wages per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.
- Review the job description.
- Apply the appropriate FLSA exemption test(s) under current regulations.
- Wages Test: Minimum pay threshold for overtime exemption. If pay is over the threshold, employee may be exempted from overtime in certain circumstances. Under the Wages Test, an employee must be eligible for overtime pay regardless of their rank or job duties.
- Duties Test: As provided by the FLSA, the Department of Labor (DOL) enforces seven classes of potentially exempt workers, including Executive, Administrative, Creative and other exempt employees. Within each of these classes, an employee’s responsibilities and role within the broader organization are considered.
- Wages Test: Minimum pay threshold for overtime exemption. If pay is over the threshold, employee may be exempted from overtime in certain circumstances. Under the Wages Test, an employee must be eligible for overtime pay regardless of their rank or job duties.
- Prepare a chart listing each position title reviewed, with recommendations for exemption status and comments relevant to the determination of the status for each job.
- Integrate the FLSA review results into the Salary Grade and Range Structure within a Compensation Plan. This includes reviewing the required qualifications, education and experience to ensure they are consistent with FLSA status; assess whether the FLSA status of jobs within an assigned Job Grade/Band is consistent or if there are outliers; and, if there are outliers, flag them to determine if jobs should be reclassified.