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Salary Alone Does Not Earn Overtime Exemption Status
If you make more than $47,476 as of December 1, does that automatically mean you are exempt from earning overtime wages? Answer...
(Updated January 6, 2020)
Will income alone make an employee exempt from earning overtime wages when working more than 40 hours a week (8 hours a day in California)?
NO. Here’s why.
In addition to meeting the minimum salary compensation rate of at least $684/week, a “white collar” employee must still meet one of the following exemption categories to be ineligible for overtime wages: Executive, Administrative, Professional, Creative Professional, and Computer Employee.
To qualify for one of these exemptions, each condition must apply as outlined below (source: dol.gov):
Primary duty: managing the company, department or subdivision.
•Regularly directs the work of at least 2+ full-time employees; and
•Has the authority to hire or fire other employees, or make suggestions and recommendations as to the change of status of other employees.
Primary duty: performance of office or non-manual work directly related to the management or general business operations.
•Exercises discretion and independent judgment with respect to matters of significance.
Primary duty: work requiring advanced knowledge ("predominantly intellectual in character") and includes work requiring discretion and judgment.
•Advanced knowledge must be in a field of science or learning and be customarily acquired by a prolonged course of specialized intellectual instruction.
Creative Professional Exemption
Primary duty: performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
Computer Employee Exemption
Primary duty must consist of:
- The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
- The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
- The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
- A combination of the aforementioned duties, the performance of which requires the same level of skills.
There are other FLSA exemption categories that don’t have minimum salary amounts, such as an Outside Sales Exemption, seasonal and recreational establishments, farmworkers, some drivers (and driver helpers), commissioned sales employees, and computer professionals. Learn more about these exempt categories here.
If you are unsure whether or not an employee should be classified as exempt, please contact our experts at HR@stratus.hr.Image credits