FLSA Exemption Testing White Collar Positions

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FLSA Exemption Testing White Collar Positions
Regulations updated by the U.S. Department of
Labor April 23, 2004
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White-Collar ExemptionTesting Updated

• Fair Labor Standard Act (FLSA)
• Unless exempt, employees must be paid minimum
  wage and overtime pay
• US Department of Labor (DOL) updated white-collar
  FLSA regulations on April 23, 2004
• Must comply by August 23, 2004
• State requirements vs. federal requirements
• New FairPay tests

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Step 1 Determine the type of job

• Executive
• Management is employees primary duty
• Administrative
• Office or nonmanual work directly related to
  managementor general business operations
• Professional
• Learned Performs work that requires highly
  advanced knowledge and education
• Creative Performs work that is artistic,
  creative or original
• Computer Primary duties are the application,
  design, development, analysis and/or modification
  of systems,networks, database, and/or programs
• Outside Sales
• Primarily makes sales or obtains orders away from
  the employers place of business

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Step 2 Determine if the employee is exempt

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered
• by FLSA and is nonexempt.

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Step 2 Determine if the employee is exempt
(cont.)

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered
• by FLSA and is nonexempt.

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Step 2 Determine if the employee is exempt
(cont.)

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered
• by FLSA and is nonexempt.

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Step 2 Determine if the employee is exempt
(cont.)

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered
• by FLSA and is nonexempt.

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Step 2 Determine if the employee is exempt
(cont.)

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered
• by FLSA and is nonexempt.

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Step 2 Determine if the employee is exempt
(cont.)

• Does the employee meet the salary test AND duties
  test?
• If yes, the employee is exempt. If no, the
  employee is covered by FLSA and is nonexempt.

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Highly Compensated Employees

• Eligible for exemption as a highly compensated
  employee if
• Earns 100,000 in total annual compensation per
  year, AND
• Customarily and regularly performs any one or
  more of the exempt duties of an executive,
  administrative, or professional employee as
  defined by 29 CFR 541