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Understanding the FLSA overtime pay exemptions

Overtime compensation is covered by a federal statute, the Fair Labor Standards Act, which requires employers to pay non-exempt employees for all hours worked over 40 hours in a week at a rate of one and a half times that employees regular rate of pay.  However, the FLSA has several “exemptions” which make workers ineligible for overtime pay.  Employers often claim incorrectly that their workers fall within these exemptions to deny their workers overtime pay, and if workers are misclassified as exempt when they are not they are allowed to file suit to recover their wrongfully-denied overtime wages.  Exemptions are not based on job titles alone – in other words, simply having an important-sounding job title like “manager” or “supervisor” does not make someone exempt from overtime pay.  Rather, in order for an exemption to apply, an employee’s specific job duties and salary must meet the requirements of the specific exemption.

There are three main exemptions that will be examined: executive, administrative and professional. These three exemptions are known as the “white collar exemptions.”  Generally speaking for all three exemptions, employees need to be paid on a salary basis that equates to not less than $455 per week. However, each exemption has its own job duty requirements:

Executive Exemption

  • Employee’s primary duty must be managing the enterprise, or managing a department of that enterprise;
  • Employee must regularly direct the work of at least two other employees; and
  • Employee must have the authority to hire and fire other employees or the recommendations as to who to hire and fire must be given weight

Administrative Exemption

  • Employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the customers; and
  • Employee’s primary duty includes the exercise of discretion and independent judgment

Professional Exemption

  • Employee’s primary duty must be the performance of work requiring advanced knowledge, which is usually defined as work that is predominantly intellectual in character and that includes exercising discretion and judgment; 
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction 

The importance of these exemptions is that they are a roadmap for employers who must comply with Federal law when it comes to unpaid overtime. Failure to abide by these rules could prove very costly to an employer and could provide a significant amount of back wages owed to an employee. Do you believe that you have worked overtime and have not been paid for your hours? Are you unsure if you fall under an exemption or not? If so, speak with an experienced overtime attorney today. Josh Borsellino is a licensed Texas attorney that understands the FLSA laws and exemptions in order to help you recover your rightful compensation. Call him today at 817.908.9861 or 432.242.7118.