The Fair Labor Standards Act is a general labor law that covers almost all workers in this country. It is imperative that all employers understand the provisions in this act so that they don’t run afoul of it.
One of the first things to know is that there are two classifications of workers – exempt and nonexempt. The exempt workers are the ones who can’t count on overtime and minimum wage requirements. These individuals are almost always salaried and must complete job duties without regard to how long it takes them. Exempt workers don’t have to record their hours worked for the purpose of receiving their pay.
Nonexempt workers are those who are paid hourly. They must receive at least minimum wage per hour. If they work more than 40 hours in a standard workweek, they receive overtime pay at a rate of at least 1.5 times their normal pay. These workers keep track of the time they work and won’t get paid if they aren’t there or don’t have paid time off to cover their hours.
Employers can use the salary basis test and the duties test to determine whether employees are exempt or not. These are very simple but make it easier to verify that you have people who work for you classified correctly.
Some positions need more specific guidelines to help you to determine the proper classification. There are also tests for administrative, professional and executive duties.
Just because an employee is considered exempt from the FLSA regarding wages doesn’t mean that they don’t have specific protections under other laws. Learning about what impacts your company and your employees can help you to remain in compliance.