Exempt or Non-Exempt? The Fair Labor Standards Act

The Federal Fair Labor Standards Act (FLSA) determines whether employees are subject to or exempt from overtime provisions. If employees are determined to be serving in a non-exempt position, overtime pay or compensatory time must be provided for working more than 40 hours in a defined workweek (Sunday 12:01am until Saturday 12:00 midnight). When non-exempt employees work over 40 hours during their scheduled workweek, they are entitled to time-and-a-half pay or compensatory time calculated at time-and-a-half for all hours actually worked in excess of 40 hours. All overtime for non-exempt employees should be approved in advance by their supervisor.

The Human Resources Department determines the exemption status of each position on campus. Job titles do not determine exempt status. For an exemption to apply, an employee’s specific job duties and salary must meet all of the requirements of FLSA regulations.

Navigating the regulations of FLSA is confusing and violations can result in fines and prosecution. The compensation team is here to help you, so call us with your questions at 936-294-1070. Human Resources makes the final determination, but we wanted to provide the following information as an abbreviated resource to help guide you when creating a new or reclassifying a current position.

FLSA Checklist

There are three major tests for exemption from overtime:

  1. Salary Level: The minimum salary required for exemption is $455 per week or $23,660 annually.
  2. Salary Basis: The employee must regularly receive a predetermined compensation amount each pay period. The compensation cannot be subject to reduction because of variations in the quality or quantity of the work performed.
  1. Job Duties: The employee’s Primary Job Duty must fall within one of the categories below:

Executive: The primary duty is management of the institution or of a customarily recognized department or subdivision. The employee must customarily and regularly direct the work of two or more employees. The employee has the authority to hire or fire other employees or make recommendations as to the hiring, firing, advancement, promotion, or other change of status of other employees.

Administrative: The primary duty is 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. The primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. The administrative exemption is also available to employees whose primary duty is performing administrative functions.

Professional: The primary duty is the performance of work requiring advanced knowledge in a field of science or learning that customarily is acquired by a prolonged course of specialized intellectual instruction. The primary duty must include work requiring advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances.

Computer-Related: The primary duty requires the application of systems analysis techniques and procedures; consulting with users to determine hardware, software or system functional specifications; and the design, development, documentation, analysis, and creation or modification of computer programs related to machine operating systems or programs.