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Jul15

Keeping Employee as Non-Exempt if Meets Exempt Criteria

Does an employer have to switch a non-exempt employee to exempt if qualifies? The employee meets all the requirements for exemption, but don’t know if we can still keep the employee at non-exempt? We’re located in California.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt. Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary each workweek and are excluded from overtime pay provisions.

Most employees are non-exempt. To be exempt, an employee must pass all three “tests”, salary level, salary basis, and duties, as outlined by the FLSA.

There is no requirement under the FLSA to classify an employee as exempt if exempt criteria are met. In fact, classifying an employee as non-exempt is safer since such employees are paid for every hour worked and receive overtime pay for hours worked in excess of 40 in a given week. Thus, the employer is adhering to all FLSA regulations. Whereas, exempt employees must be properly classified in order to avoid FLSA violations.

Employers in California must adhere to the FLSA. However, California wage laws offers employees even more protection. In addition to the 40-hour workweek overtime pay regulation set forth by the FLSA, California also requires employers to pay overtime to employees who work more than 8 hours in a work day and double time to employees who work over 12 hours in a work day. So, it’s important to consider the potential financial impact of keeping an employee as non-exempt if he otherwise qualifies for exempt status.

It’s worth mentioning that the federal Department of Labor has proposed revisions to exempt criteria under the FLSA. The proposed minimum salary level to qualify for exemption is $50,440. The DOL expects the new regulations to take effect in 2016; however, the regulations have yet to be approved.

This entry was posted on Wednesday, July 15th, 2015 at 8:38 pm and is filed under
Compensation, Labor Laws.
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