FLSA Classification Review for Exempt and Nonexempt Roles
The Fair Labor Standards Act (FLSA) generally requires covered, nonexempt employees to receive at least the applicable minimum wage and overtime pay at not less than one and one-half times the regular rate for hours worked over 40 in a workweek. State and local wage-and-hour rules may provide additional protections.
Section 13(a)(1) provides exemptions for certain executive, administrative, professional, and outside sales employees, while separate provisions address qualifying computer employees. Exempt status depends on the applicable salary basis, salary level, and duties requirements; a job title or salaried pay arrangement alone is not enough. JER HR reviews the work actually performed and documents recommendations for employer and counsel review.
What an FLSA Compliance Audit Reviews
For each selected position, JER HR Group uses a structured review process to:
- Review the job description against actual duties, reporting relationships, and decision authority.
- Apply the potentially relevant federal exemption tests and flag state or local issues for further review.
- Salary Basis and Level: Review how the employee is paid and compare compensation with the currently applicable threshold. Meeting a salary threshold does not establish exempt status without the required duties.
- Duties Test: Analyze the employee’s primary duty, discretion, management responsibility, specialized knowledge, computer work, or outside-sales activity under the potentially applicable test.
- Prepare a position-level findings chart with the recommended classification, supporting observations, assumptions, identified documentation gaps, and issues requiring legal review.
FLSA and compensation resources, free to download.
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Review FLSA classifications before roles or regulations change.
- The engagement begins with job descriptions, organization charts, salary-basis information, reporting relationships, current classifications, and interviews or questionnaires when the written record does not reflect the work.
- Consultants compare each role with the potentially applicable exemption criteria and document the factual basis, open questions, and recommended next steps without promising a legal outcome.
- Results can inform job-description updates, payroll and timekeeping decisions, manager communication, and alignment with the organization’s compensation structure.
- Employers should review classifications when duties, reporting relationships, pay practices, regulations, or state and local requirements change, and involve qualified counsel where appropriate.
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