What and Who Are Exempt Employees Under the FLSA?

If you are a worker in California, you have the right to be paid for the hours that you work. And, most importantly, the right to be paid extra for any hours that you work as overtime, generally described as more than 40 hours a week. That is all pursuant to the Fair Labor Standards Act, or FLSA which requires most employees in the US be paid at least the federal minimum wage for all hours worked and overtime pay, at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

That is, you have these rights, unless you’re exempt.

What are Exempt Employees?

An exempt employee is an employee who does not have to be paid pursuant to the rules, laws, and case law, related to the FLSA. So, all of the protections of the FLSA, do not apply to FLSA exempt employees.

It would be nice if the FLSA just listed a bunch of professions and said “these jobs are exempt.” But that’s not exactly how it works.

The FLSA instead exempts certain categories of workers. And the problem is that many of the categories are not clearly defined and may be open to interpretation. That’s why, when faced with an FLSA lawsuit, many employers’ first line of defense is to try to claim that the employee making the FLSA wage or overtime claim, is exempt.

Executive and Administrative

Employees considered executives are generally exempt from having to be paid under the FLSA’s laws. An executive is usually an employee who has some level of management or supervision of at least two other employees. They may have other duties as well, such as setting policy, sitting in decision-making meetings, or input on decisions related to hiring, firing, or promotions within the company.

There is a separate exemption called administrative, which is close in nature to the executive exemption. Administrative employees are those who support the business. Think of employees who may work in the human resources department, or who may perform accounting services, or who may review company contracts, or who just serve as help to executive employees.

Professional Employees

The professional exemption applies to any employee who acts in a specialized field, usually one that requires an advanced degree, or which requires licensure by a government entity. Architects, engineers, teachers, lawyers, and medical professionals are included. Also included are creative professionals, which include artists or musicians.

Inside and Outside Sales

An outside salesperson is someone who performs their job mostly outside of the office—usually, more than 50% of the employee’s time working must be out of the office. It does not matter what the employee’s base salary is, and there is no minimum salary that an employee has to make to qualify for the exemption.

Contrast this with inside salespersons—basically, those who work on commission. Inside salespersons are also exempt, but only if they make more than 1.5 times the minimum wage, and only if more than half of their work time is spent trying to make sales.

Contact the San Jose employment attorneys at the Costanzo Law Firm today if you feel you haven’t been paid for time you worked at your job.

Sources:

dol.gov/agencies/whd/fact-sheets/17a-overtime

dol.gov/agencies/whd/compliance-assistance/handy-reference-guide-flsa