The Fair Labor Standards Act (FLSA) establishes minimum wage and overtime pay requirements that employers must follow. Covered employees (non-exempt employees) must be paid a minimum wage of not less than $7.25 per hour, and must be paid overtime at a rate of not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek.
Most private employers whose annual gross volume of sales or business is not less than $500,000 must comply with the FLSA.
Some employees are considered exempt from the FLSA’s overtime pay and minimum wage requirements. Exemptions are very narrow and, if challenged, are interpreted against the employer claiming the exemption.
A list of the more commonly used exemptions follows. If an employee meets one of the exemptions, an employer may not have to apply the wage and/or overtime rules to the individual.
Exemptions are applied on a workweek basis. Employees who perform both exempt and non-exempt tasks in the same workweek are not exempt for the week.
- Commissioned sales employees.
- Computer professionals.
- Drivers, loaders, mechanics.
- Farmworkers on small farms.
- Auto sales professionals.
- Seasonal and recreational establishment employees.
- Executive, administrative, professional and outside sales employees who are paid on a salary basis.
- Casual babysitters.
- Companions for the elderly.
- Newspaper delivery employees.
Employers should carefully analyze job duties before classifying employees as exempt or not exempt from the FLSA. Employers should also consider any state laws that may apply to wage or overtime payment.
