The Fair Labor Standards Act: Who Isn’t Covered?

The Fair Labor Standards Act (FLSA) is a federal law that dictates what employees have to be paid. In addition to mandating that employees be paid the required minimum wage, the FLSA also requires that tipped employees be paid a certain way, and that overtime pay be provided for employees that work more than 40 hours a week.

Complex Rules and Harsh Penalties

The rules for the FLSA can be complex. But do you have to worry about following them?

The answer is that it depends on whether your employees are covered under the law, or whether they are considered exempt. The FLSA has a host of categories of workers that don’t get protection under the FLSA.

Because the FLSA has harsh penalties for failing to follow the law—including payment of attorneys fees, and triple the amount of wages owed to the employee in some cases—knowing who is covered and not covered under the law, can be pretty important.

As a general rule, the following categories are exempt from the FLSA, meaning they do not have to be paid in the exact way the FLSA says

• Employees that earn a salary that is more than $100,000 per year are exempt.
• High level employees are exempt. That sounds vague, and the law, and cases, have all come up with varying definitions of what this means. As a general rule, employees that are in supervisory positions, management, or supervising other employees, will be exempt. Employees that have authority to hire or fire other employees, will be considered exempt.

There are some objective criteria that courts will use to see if an employee meets this “management exemption.” Courts will look to see if the employee makes more than $455 per week, whether the employee directs two or more other employees and the supervisor’s job must be primarily supervisory tasks.

• Administrative employees are also exempt. The employee must make more than $455 per week, and the job has to involve non-manual labor. The work needs to relate to, or assist, management directly. The employee should also be able to make decisions for the company when needed.
• Professionals are exempt, so long as they earn more than $684 per week. The job needs to require advanced technical skills or knowledge, with decision-making responsibilities.
• Outside salespeople are also exempt, so long as the salesperson is allowed to make sales outside the office. An employee bound to a desk in your office will not be exempt, just because he or she makes sales as part of the job.
• Most employees in computers, software and software development, technology, or IT are exempt.

The court will look at the employee’s actual duties and day to day jobs. Simply classifying someone as a “manager” or calling someone your IT person, to avoid liability, won’t allow you to ignore the FLSA’s requirements.

Call the West Palm Beach employment law attorneys at Pike & Lustig to help with your employment law questions or legal problems.

Resource:

dol.gov/agencies/whd/compliance-assistance/handy-reference-guide-flsa