4 Ways to Tell If Workers Are Exempt From Overtime Pay

4 Ways to Tell If Workers Are Exempt From Overtime Pay

Running afoul of the Fair Labor Standards Act can cost a company big between attorney fees and a potential settlement. Mansell Law’s website offers a refresher employee payment course, including the highly compensated worker exemption.

Key points:

  • Under the FLSA, covered nonexempt employees at most private and public entities must receive at least the federal minimum wage, or more if a state requires it, and be paid overtime for any time exceeding 40 hours a week at 1.5 times the regular hourly rate.
  • Tipped employees are a bit trickier. They can receive $2.13 an hour provided their tips and wages together equal the minimum. If not, employers must make up the difference.
  • Exempt employees, i.e., professionals and executives, are not covered by the overtime and minimum-wage requirements.
  • And then there is the case of the highly compensated worker exemption. If an employee meets all the criteria here, the person is exempt from overtime and minimum wage rules:
    • The worker makes a total annual compensation of $100,000 or more.
    • Compensation includes $455 per week paid on a salary basis.
    • Primary duties include office or nonmanual work.
    • The employee customarily performs at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee.
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