FLSA Status

What Is FLSA Status?

Whether an employee is considered exempt or non-exempt under the Fair Labor Standards Act determines their FLSA status (FLSA). After working a predetermined amount of hours, a non-exempt employee is entitled to overtime pay, whereas exempt employees are not. 

How To Determine An Employee's FLSA Status

Even while the Department of Labor's instructions for categorizing employees as exempt or non-exempt is very simple, actually classifying employees is not always simple, largely because there are a number of concerns you need to address in order to make a conclusion. FLSA status is determined by the position itself, not by the person holding the position. An employee can work in both exempt and non-exempt roles throughout their career as a result.

How To Determine FLSA Classification

Salary Basis

No matter how their work schedule changes throughout a given week, salaried employees receive a salary rather than an hourly wage. Employees who receive a wage and meet the qualifications for salary level and job duties can be categorized as FLSA exempt.

Salary Level

Employees must be designated as non-exempt under a new overtime regulation that becomes effective in January 2020 if their annual compensation is less than the FLSA's $35,568 ($684 per week) level. Depending on their compensation basis and the tasks they do, employees whose earnings above this amount may be categorized as exempt or non-exempt. Up to 10% of the pay that is used to establish overtime eligibility may be in the form of commissions or non-discretionary bonuses.

Duties Carried Out

The type of duties done has an impact on whether a position is exempt or not, not the job title. The Department of Labor generally views some positions as exempt, including executive positions, administrative posts, and other professional positions requiring particular education or training.

Managing The Classification Process: Some Tips

It is simpler to make a choice regarding whether employees should be classed as exempt or non-exempt when you have access to resources and professional guidance. Follow these guidelines to properly classify employees:

• Think about each classification criterion: Employee classification based solely on pay or job responsibilities can result in expensive mistakes. Consider the FLSA categorization of every new hire using the necessary standards, and reevaluate whenever a worker is promoted or changes jobs.
• Utilize the compliance tools that are available: Resources can guide you step-by-step through the categorization procedure, such as a worksheet made exclusively for FLSA classifications.
• Utilize integrated technologies to precisely track and pay overtime: You may track employee regular and overtime hours with the aid of an integrated workforce management solution and adhere to a number of relevant labor laws.

Conclusion

Depending on whether they are subject to FLSA rules for pay (whether they are non-exempt) or not, your employees may be categorized as FLSA non-exempt or exempt (if they are exempt).

Non-exempt FLSA employees are paid hourly and are entitled to overtime pay in addition to their regular pay. Non-exempt employees' compensation must adhere to FLSA regulations in the letter.

Employees who are FLSA-exempt receive a wage and are not entitled to overtime compensation. No matter how many hours they labor, they make the same amount of money. A number of requirements must be met before an employee can be deemed FLSA-exempt.

Employee misclassification can result in lawsuits and has a negative impact on how your business treats its staff. In order to comply with federal and state rules, it is crucial to identify the appropriate workers as FLSA non-exempt.