Employers Looking to Save A Buck: Are You Being Denied Overtime By Being Misclassified As Exempt From Overtime?

Under the Fair Labor Standards Act, an employer must, in most situations, pay overtime and a minimum wage to all non-exempt employees.  Non-exempt employees are, generally, employees who do not qualify under any of the FLSA’s numerous exemptions based on an analysis of their job duties and compensation.

EXEMPTIONS

The most common exemptions are:

THE EXECUTIVE EXEMPTION:

To be covered by this exemption, (1) the employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $684 per week; (2) the employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; (3) the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (4) the employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

THE ADMINISTRATIVE EXEMPTION:

To be covered by this exemption, (1) the employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week; (2) the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (3) the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

THE LEARNED PROFESSIONAL EXEMPTION:

To be covered by this exemption, (1) the employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week; (2) the employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; (3) the advanced knowledge must be in a field of science or learning; and (4) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

THE CREATIVE PROFESSIONAL EXEMPTION:

To be covered by this exemption, (1) the employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week; and (2) the employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

THE OUTSIDE SALES EXEMPTION:

To be covered by this exemption, (1) the employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and (2) the employee must be customarily and regularly engaged away from the employer’s place or places of business.

THE COMMISSIONED SALES EMPLOYEES EXEMPTION:

To be covered by this exemption, (1) the employee must be employed by a retail or service establishment, (2) the employee’s regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked, and (3) more than half the employee’s total earnings in a representative period must consist of commissions.

THE COMPUTER PROFESSIONALS EXEMPTION:

To be covered by this exemption, (1) the employee must be compensated either on a salary or fee basis at a rate not less than $684 per week; (2) the employee must be employed as a computer systems analyst, computer programmer, software engineer, or another similarly skilled worker in the computer field performing the duties described below; (3) the employee’s primary duty must consist of: (a)The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; (b) the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; (c) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; (d) a combination of the aforementioned duties, the performance of which requires the same level of skills.

THE MOTOR CARRIER EXEMPTION;

To be covered by this exemption, (1) the employee must be employed by a motor carrier or motor private carrier, as defined in 49 U.S.C. Section 13102; (2) a driver, driver’s helper, loader, or mechanic whose duties affect the safety of operation of motor vehicles in transportation on public highways in interstate or foreign commerce; and (3) not covered by the small vehicle exception.

There are several additional exemptions.  If your job duties and compensation fall in one of these exemptions, you likely are not entitled to overtime compensation from your employer. However, if you do not qualify under one of these exemptions and your employer has failed to pay you overtime compensation when you work more than 40 hours in a workweek, please contact an overtime lawyer at Weiner & Sand LLC to discuss your rights.