FLSA Exemptions

Abstract

In the past few decades, one of the most common and costly wage and hour legal disputes has been the classification of employees as “exempt” or “non-exempt” from Fair Labor Standards Act (FLSA) coverage. Unless exempt, all US employees are covered by the FLSA and thus entitled to certain protections, such as minimum wage and overtime pay. The FLSA permits employers to classify employees as exempt, provided several specific criteria are met. Exempt employees are paid a fixed salary regardless of the number of hours they work and do not receive overtime. There are several exemptions for which an employee can qualify, with the three most common being the executive, administrative, and professional exemptions, which are collectively referenced as the “white-collar” exemptions. Although the specific criteria differ by exemption, all exemptions are based on two broad factors: the manner and amount of pay the employee receives (“salary test”) and the employee’s job duties (“duties test”). An employee must surpass the minimum thresholds for both tests to be exempt from the FLSA. To satisfy the salary test, an employee must be paid a minimum salary of $455 or more per week ($23,660 per year). To satisfy the duties test, the employee’s “primary duty” must meet certain characteristics. This chapter provides the criteria that must be met to qualify for each exemption along with methodological approaches to evaluate the duties test under each exemption. Evaluation of exempt status requires detailed job analysis data that addresses the work employees perform, the time spent performing that work, and the context in which that work is performed.

The original version of this chapter was revised. A correction to this chapter can be found at https://doi.org/10.1007/978-3-319-74612-8_10