What are exemptions under the Fair Labor Standards Act?

As a business owner, one legal aspect that you have to get right is classifying your workers. For the most part, employees are entitled to minimum wage and overtime pay under the Fair Labor Standards Act (FLSA).

Nonetheless, there are some exceptions and certain workers may be considered exempt. For an employee to hold exempt status, they must be paid on a salary basis. For exemption from under the FLSA, workers must also carry out certain duties.

Outlined below are the five primary types of exempt worker:

Executives

A worker is classed as an executive if they manage a team of two or more people. They must also have specific powers, such as being able to hire and fire, set salary terms and discipline workers. Employees at this level are typically subject to an executive exemption under the FLSA.

Administrative workers

In some cases, administrative workers are also exempt under the FLSA. The duties of administrative workers typically include dealing with tax, finances, procurement, auditing, budgeting, human resources and health and safety. Exempt administrative workers must have the ability to make independent decisions that impact the operation of the business.

Professionals

Professional employees are typically those who hold or are pursuing specialist knowledge in fields such as law, medicine, accounting, engineering and architecture. The most common types of professional employees include doctors and lawyers.

Computer employees

Certain computer employees may also have exempt status. Their primary duties must include:

• Performing systems analysis
• The design, development and modification of computer systems
• The testing of computer systems

Generally, computer employees must be at a higher level to be exempt.

Outside sales workers

Sales workers who spend the majority of their time outside of the office or place of business are also generally considered to be exempt. Sales people who spend the majority of their time in the place of business are non-exempt.

As an employer, it is important to classify your workers appropriately. We help businesses with legal compliance, contact us for a consultation.