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Section 13 of the Fair Labor Standard’s Act (FLSA) provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional, outside sales, and certain computer employees. To qualify for exemption, employees generally must meet specific criteria regarding their job duties and be paid on a salary basis at not less than $455 per week.
Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department of Labor’s regulations.
In recent years, there has been a tremendous increase in litigation involving wage and hour claims. Employers must be extremely careful when classifying employees, and should ensure that exempt employees meet any applicable requirements of state law as well as the federal requirements that are summarized below.
To qualify for the executive employee exemption, all of the following tests must be met. The employee must:
Common challenges and issues related to this exemption include:
To qualify for the administrative employee exemption, all of the following tests must be met. The employee must:
Common challenges and issues related to this exemption include:
To qualify for the learned professional employee exemption, all of the following tests must be met:
To qualify for the computer employee exemption, the following tests must be met. The employee must be:
To qualify for the outside sales employee exemption, all of the following tests must be met:
Highly compensated employees performing office or non-manual work and paid total annual compensation of $107,432 or more (which must include at least $684 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee identified in the standard tests for exemption.
The exemptions provided by FLSA Section 13(a)(1) apply only to “white collar” employees who meet the salary and duties tests set forth in the Part 541 regulations. The exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy.
FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt under the Part 541 regulations no matter how highly paid they might be.
The exemptions also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level. This group performs work such as:
Various minimum wage exemptions apply under specific circumstances to tipped workers, workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, and student-learners.
Some states have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions of each law which provide the greater benefits.
Any individual whose earning or productive capacity is impaired by a physical or mental disability, including those related to age or injury, may be paid sub-minimum wages when the impairment is certified by the Labor Department. The sub-minimum wages must be comparable to wages paid to non-disabled workers. The DOL authorizes employment at less than the minimum wage to increase opportunities for disabled workers to be employed.
Employers interested in applying for a sub-minimum wage certificate for disabled workers should contact the Department of Labor Wage and Hour in their region.
A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive the statutory minimum wage.
The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85 percent of the minimum wage.
The certificate also limits the hours that the student may work to eight hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out. It also requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid the statutory minimum wage.
There are some limitations on the use of the full-time student program. For information on the limitations or to obtain a certificate, contact the Department of Labor’s Wage and Hour regional office.
This program is for high school students at least 16 years old who are enrolled in vocational education (shop courses). The employer that hires the student can obtain a certificate from the Department of Labor which allows the student to be paid not less than 75 percent of the minimum wage, for as long as the student is enrolled in the vocational education program.
Employers interested in applying for a student learner certificate should contact the Department of Labor Wage and Hour Regional Office with jurisdiction over their state.