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FLSA Overtime Exemptions: Ensuring Compliance With FLSA Regulations

The Fair Labor Standards Act (FLSA) is a federal employment law that applies to most public and private employees in the United States. The FLSA includes numerous rules regarding overtime pay, including setting the mandatory minimum for overtime pay at 1.5 times the regular pay rate for many types of employees, and establishing a national standard for the number of hours an employee can work per week before being entitled to overtime pay calculations. Federal law requires companies to comply with FLSA regulations, but some businesses fail to do so, either deliberately or through clerical oversight. Employees who are affected by this non-compliance may have grounds for a lawsuit against their employer for violating their labor rights. The New York business litigation lawyers at Schwab & Gasparini protect companies from such litigation by ensuring compliance with all FLSA regulations. If you have questions about defending against employee FLSA overtime exemptions or another employment matter, call the Syracuse office today (315) 422-1333, or reach the firm’s Albany office at (518) 591-4664, or White Plains Office and Hudson Valley at (914) 304-4353.

Who Is Covered by the FLSA?

Employees are presumed to be covered by the FLSA unless the employer can establish that the company is not subject to the FLSA or that they qualify for an exemption to the FLSA. Certain individuals may not be covered, such as independent contractors, trainees, interns, externs, apprentices, and graduate assistants. In an employer-employee relationship, the FLSA applies when either the individual or enterprise coverage rules are satisfied. According to the Fair Labor Standards Act as amended in 1983, employees are covered if they are “engaged in commerce or the production of goods for commerce.”

Covered employees are entitled to at least one-and-a-half times their hourly wage when they work over 40 hours in a week. The FLSA does not limit how many hours employees over age 16 may work in one week. These rules are applied based on the employee’s workweek, which consists of seven straight 24-hour periods, or 168 hours. 

What Are the Overtime Exemptions of the FLSA?

Although most types of employees are entitled to overtime pay under the FLSA, there are five categories of workers that are exempt from these regulations. The United States Department of Labor explains the following five sets of exemptions:

Executive Exemption

The FLSA executive exemption for overtime pay applies to employees primarily engaged in managing a company or department. To be exempt from overtime pay, executive employees must oversee the work of at least two other full-time employees and have the authority to hire or dismiss other staff members. In addition, they must earn a salary of at least $684 per week.

Administrative Exemption

The FLSA administrative exemption pertains to employees whose job duties include non-manual or office work closely related to the management policies or general business operations of the company. Exempt administrative employees have independent judgment and discretion over significant matters within the organization. To qualify for this exemption, employees must have a weekly salary of at least $684. 

Professional Exemption

Under the FLSA professional exemption, employees whose work requires advanced knowledge in the specific fields of science or learning are exempt from overtime pay. This includes professions like law, medicine, accounting, and creative roles like writing, music, and acting. As with the other exemptions, employees only qualify for the professional exemption if they earn at least $684 weekly. If you are unsure whether employees on your staff qualify for the professional exemption or have other questions about FLSA overtime exemptions, you can learn more by speaking with the business attorneys at Schwab & Gasparini.

Computer Employee Exemption

The FLSA computer employee exemption exempts certain information technology roles from receiving overtime pay. This exemption typically applies to employees with expensive expertise in the computer field, such as computer programmers, system analysts, software architects, engineers, and other skilled workers. To be eligible for this exemption, computer employees must earn either $684 per week gross pay or an hourly rate of at least $27.63.

This exemption applies to highly skilled roles involving systems analysis, design, development, testing, and modification of computer systems and programs, as well as work related to machine operating systems. However, this exemption does not include manual or physical labor related to building or repairing computer hardware. 

Outside Sales Exemption

To be eligible for the FLSA outside sales exemption, an employee’s work must primarily consist of making sales or securing orders or contracts for services or facilities, typically away from the employer’s business premises. Unlike other exemptions, the outside sales exemption does not impose specific salary requirements. Employees who do not meet the outside sales exemption criteria may still qualify for alternative exemptions outlined in the FLSA, provided they meet the requisite criteria for those specific exemptions.

How Can Employers Ensure FLSA Compliance?

Companies should have strategies in place for ensuring compliance with all FLSA regulations. Failure to comply with these regulations could result in costly lawsuits against the company. Below are some simple steps companies can take to ensure FLSA compliance: 

 

• Conduct regular audits - Regularly reviewing employee classifications and job duties helps ensure accurate FLSA classification and prevents misinterpretations that could lead to violations and litigation.

• Maintain accurate records - Keep comprehensive records of employee work hours, wages, and overtime pay. Accurate record-keeping facilitates transparency and allows for easy verification of compliance during audits.

• Provide ongoing training - Management and human resources teams should be educated about FLSA regulations, including overtime pay provisions and exemptions. Training ensures a comprehensive understanding of the law and fosters a proactive approach to compliance within the organization. 

• Implement clear policies - Establishing clear, well-defined policies on work hours, overtime compensation, and employee classifications helps prevent misunderstandings and promotes consistency in FLSA compliance across the business.

• Seek legal guidance - Consulting with lawyers well-versed in FLSA regulations can provide valuable insights and legal guidance, ensuring that the business remains up to date on any amendments or changes to the law and enabling proactive compliance measures.

By adhering to these strategies, businesses can effectively ensure compliance with FLSA overtime regulations and foster a fair and legally sound work environment that prioritizes employee rights.

Learn More From Our New York Business Litigation Attorneys

Business owners should take proactive measures to protect themselves from potential FLSA overtime violations. The dedicated business lawyers at Schwab & Gasparini help companies ensure compliance, as well as representing companies that have been accused of violations. To learn more about how to ensure and demonstrate compliance with FLSA overtime exemptions, or to request a consultation regarding any other business regulatory matters, call (914) 304-4353 in White Plains or the Hudson Valley, (518) 591-4664 in Albany, or (315) 422-1333 in Syracuse.

Tue Jan 2 2024, 12:00am