The Fair Labor Standards Act (FLSA) specifies that there are two types of employees, exempt and nonexempt.  Employees who meet certain criteria are exempt from minimum wage, overtime, and some record keeping regulations.  To differentiate between exempt and nonexempt employees, you will need to look at the duties, responsibilities, and discretionary authority your employees have.  We will now discuss the two classifications.

Exempt Employees
Must be paid on a salary or fee basis at a minimum of $455 per week.
Executives- must direct the work of at least two full time employees and have authority to hire and/or fire, and are associated with management decisions.
Administrative Employees– must exercise independent judgement and discretion in matters of significance.  Must not be closely supervised.
Professionals– there are two types of professionals: Learned or Creative.  Learned Professionals, those whose duties require advanced knowledge through specialized study.  Creative Professionals, those whose duties involve the use of originality and creativity.  Examples are:  Teachers, Engineers, and Attorneys.  Please see our HR Support Center for more details on this matter.

All other employees are Nonexempt employees and are therefore subject to  FLSA.

Laws vary by state, so please consult our HR Support Center for more information.

Travis Ward
Payroll Experts, Inc.


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