BY JIM MARCO
The Fair Labor Standards Act (FLSA) is the
piece of federal legislation that established
minimum wage and overtime requirements, and
defined which employees are exempt from the
minimum wage and overtime provisions of the act,
and which employees need to receive overtime pay.
The FLSA provides definitions under which employee
can be exempt. These exemptions fall under
certain categories such as executive exemption,
administrative exemption, professional exemption,
outside sales exemption, and the computer
employee exemption. Exempt employees are often
referred to as salaried employees.
In order to qualify for exempt status, employees
must meet three critical criteria related to job duties,
a minimum level of weekly pay, and they must
be paid on a salaried basis, which is also defined
by the FLSA. Companies who pay all employees a
weekly salary, thinking they are avoiding overtime
payments, are taking a substantial risk. Both the
federal and state departments of labor enforce
these laws, although it is usually the state that you
will be dealing with during an audit.
This can result in back pay, for several years,
fines and other penalties. Your best defense is an
accurate and compliant job description, good job
analysis, and a thorough documented review of
the requirements.