FLSA Status
Meaning & Definition
FLSA Status
The Fair Labor Standards Act (FLSA) classifies employees as exempt and non-exempt from overtime pay and other wage protections. This classification is called the FLSA status of the employee. It determines their eligibility for overtime pay, minimum wage, and record-keeping requirements.
An exempt employee is not paid overtime because that employee meets certain criteria, such as duties, salary level, and salary basis. Exempt employees generally hold positions like executives, administrators, professionals, outside sales, and some computer-related jobs. A non-exempt employee is one for whom FLSA protection for overtime and minimum wage applies; such employees are to be paid overtime for work over 40 hours in a workweek.
FLSA status determination must consider the duties of the job, compensation arrangements, and whether or not the employee qualifies for exemptions. Misclassification can result in compliance violations, back pay actions, and penalties. Hence, accurate classification of an employee's FLSA status is important.
Frequently Asked Questions (FAQs)
What is an exempt employee?
An exempt employee is not entitled to overtime compensation under the FLSA. Such employees satisfy a specific salary level threshold, receive a salary-based payment, and engage in work functions that belong to specified exemption categories, such as an executive or professional position.
Who is considered a non-exempt employee?
A non-exempt employee can claim overtime pay for work exceeding 40 hours in a week. They are usually paid an hourly wage and must also be paid at least the federal minimum wage.
What are the major exemptions listed in FLSA?
Most common exemptions include executive, administrative, professional, outside sales, and computer-related occupations. Each has some distinct job duties and minimum salary threshold that must be satisfied to qualify for exemption.
How is FLSA status determined?
The employer must set compensation arrangements based on salary level and on a salary basis, and then compare the employee's job duties with the requirements. Any of the three not complying with FLSA would make the employee non-exempt.
Who is entitled to receive overtime pay?
For more than 40 hours of work in any one week, non-exempt employees must be paid overtime at a rate equivalent to at least 1.5 times their regular rate of pay. On the other hand, an exempt employee will not be compensated for overtime.
Is the designation of job title an absolute determining factor for FLSA status?
No. The job title is not quite adequate. Actual job duties and compensation must match FLSA-exemption criteria for an employee to be considered exempt.
Can a salaried person be non-exempt?
Yes, there are some types of salaried employees who are not exempt and therefore non-exempt (meaning entitled to overtime compensation).
When should FLSA status be reviewed?
Job classification should regularly be reviewed—especially when the job duties change, compensation is altered, or changes are made to FLSA law.
What happens if an employee is misclassified under the FLSA?
The employer may be required to pay back wages, overtime pay, interest, plus civil fines (if applicable). It can also lead to lawsuits and investigations by the DOL.
