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Exempt Employee doing Hourly Work

Can an exempt employee lose there exempt status if they are required to do an hourly persons job?

Not necessarily. Even if an employee performs the duties of a non-exempt employee, as long as his position in its entirety meets the criteria for exemption than he is still eligible for exempt status.

To be exempt, an employee must pass all three “tests”, salary level, salary basis, and duties, as outlined by the federal Fair Labor Standards Act (FLSA).

The salary level test: Employees who are paid less than $455 per week (FYI: the DOL has proposed to increase this to $970 per week in 2016) are non-exempt.

The salary basis test: An exempt employee must receive a regular, predetermined amount of compensation each pay period on a weekly, or less frequent, basis. Aside from a few exceptions, an employee must receive the full salary for any workweek during which the employee performs any work, regardless of the number of days or hours worked.

The duties test: An employee who meets the salary level and salary basis tests is exempt only if he/she also performs exempt job duties. The actual tasks of the job are to be evaluated, not the job title. There are three typical categories of exempt job duties titled executive, professional, and administrative.

Job duties are exempt “executive” job duties if the employee regularly supervises two or more other employees, has management as the primary duty of the position, and has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments).

“Professionally” exempt work is predominantly intellectual, requires specialized education, and involves the exercise of discretion and judgment. Advanced degrees are the most common measure of this but are not absolutely necessary if an employee has attained a similar level of advanced education through other means and performs essentially the same kind of work as similar employees who do have advanced degrees.

“Administratively” exempt employees provide support to the operational or production employees and have a major impact on the overall business. An administratively exempt employee has the authority to create or interpret company policies, has responsibilities that directly relate to the overall business operation, has the decision making ability to make significant financial impacts, and has the authority to deviate from company policy without prior approval.

So, for example, a manager may meet all of the above criteria but occasionally do tasks normally assigned to an administrative assistant. In doing so, the exempt status will not be jeopardized.

Now, if the employee starts to perform more work duties indicative of a non-exempt employee and no longer meets the aforementioned criteria then the exempt status is absolutely in jeopardy.

This entry was posted on Friday, November 20th, 2015 at 3:08 pm and is filed under
Compensation, Labor Laws.
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