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.
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.