Exempt or Non-Exempt? Why FLSA Classifications Matter

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Stefani M. Butschle, Esq.Director of Human Resources and In-House Counsel

The Fair Labor Standards Act (FLSA) requires that most employees be paid at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 hours in a work week. However, the FLSA provides an exemption for those working in certain roles, commonly referred to as “white collar exemptions.”

FLSA Summary

Exemptions are based on an employee’s specific job duties and compensation received – not on the job title itself.  Conducting annual exemption assessments for all positions within your company can save you thousands of dollars should a lawsuit be initiated. The FLSA has authorized the Wage and Hour Division of the Department of Labor to assess penalties up to $1,100 per violation.  In addition, the employer would be responsible for back-paying the employee the wages he would have received had he been classified properly.  (See www.dol.gov/elaws/esa/flsa/14c/20i.htm).

Click Here for more detailed information on the different categories of exemptions permitted under the FLSA. For more information on this topic, or to see how SIA Consulting can assist you in completing exemption assessments to prevent costly penalties and back-pay.