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High Salary Exemptions from FLSA

We have a manager at our company that receives an annual base of $150,000. Is he exempt from the FLSA?

He might be. The FLSA is a national Act that regulates payment for employees in companies across the country. The Act focuses on ensuring that all employees receive the minimum wage and the appropriate overtime payments, as long as they are covered under the Act (there are many exempt employees and types of organizations.) The FLSA stands for the Fair Labor Standards Act.

There are a number of employee types that are exempt from the FLSA regulations. Yes, highly compensated employees may be an exemption, but it’s best to ask your labor law attorney, as it is up to your company to prove that your employee is exempt under these terms.

Basically, if an employee makes an annual compensation that is equal to or greater than $100,000 and if that employee makes a minimum of $455 per week as a salary, then the employee might be exempt. Keep in mind that the primary duty of the employee should be to work in the office on non-manual work. This same employee must regularly perform at least one of the duties that the exempt administrative, executive or professional employee performs.

That means that the employee that is exempt on the basis of his high salary or compensation should either manage the organization in some capacity, help to regulate business processes, as an administrator would, or perform duties that are intellectual in character.

Other exempt employees may include executives, administrators, professionals (who have a specific trade), and creative professionals. However, all of these types of employees must not only receive at least $455 per week for their services, but the organization must also prove that they do indeed fall within the exempt category. Again, this is why it is important to have a labor law attorney consult with you about your employees before you claim them as exempt employees. The FLSA is very strict with its regulations and seeks to regulate as many employees as possible.

This entry was posted on Monday, September 10th, 2007 at 2:31 pm and is filed under
Benefits, Compensation, Human Resources Management, Labor Laws.
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