Are Salaried Employees Exempt from FLSA?
It’s a common misunderstanding in the realm of employment law that salaried employees are exempt from the Fair Labor Standards Act (FLSA). The answer to this is not a simple yes or no. To shed more light on this matter, it’s essential to dissect the complexities of FLSA and its impact on salaried employees.
What is FLSA?
The Fair Labor Standards Act (FLSA) was established in 1938 as part of President Franklin D. Roosevelt’s New Deal legislation. FLSA is a federal law that establishes minimum wage, overtime pay, record-keeping, and youth employment standards. It impacts both full-time and part-time workers in the private sector and in federal, state, and local governments. It was a critical response to the labor exploitation issues that were rampant during the Great Depression era.
Before the enactment of FLSA, workers in the United States, including children, often labored in harsh conditions for long hours and meager wages. There were few federal laws protecting workers from exploitation, leading to widespread abuses in several industries.
FLSA was therefore established with a twofold objective:
- Protecting Workers: The primary purpose of FLSA was to protect workers from exploitation. The Act established a national minimum wage to ensure workers received fair pay for their labor. It also put in place a maximum 40-hour workweek and mandated that employers pay overtime to non-exempt employees who work more than 40 hours in a week. This was done to discourage employers from demanding excessive work hours.
- Regulating Child Labor: One of the major components of FLSA was the regulation of child labor. Before its enactment, child labor was prevalent in many industries. FLSA established minimum ages for employment and restricted the number of hours children could work, thus offering significant protections to young workers.
Over the years, FLSA has been amended several times to increase the minimum wage, expand overtime protections, and update child labor laws. Despite these changes, the fundamental purposes of the Act—to protect workers from exploitation and regulate child labor—remain the same. The FLSA continues to be a cornerstone of workers’ rights in the United States.
Who is exempt from FSLA?
To qualify for an exemption from the FLSA’s requirements of minimum wage and overtime pay, an employee must be classified as an “Exempt” employee. This classification is not determined by the salary factor but is largely contingent upon the role an employee holds and the nature of their responsibilities.
Exempt employees generally include individuals in a managerial role, supervising at least three employees. This group also extends to executives or administrators, as well as professional employees who exercise independent judgment in their roles. These professionals can range from lawyers and doctors to scientists and computer programmers, among others. The crux of the matter is that these roles typically involve a degree of autonomy and decision-making power that sets them apart from non-exempt employees.
For instance, a salaried manager in a retail store, who makes independent decisions about staffing and operations, could be classified as exempt. Similarly, a computer programmer, working on complex algorithms and coding, could also qualify as an exempt employee, given the level of specialized knowledge and independent judgment required.
Contrarily, suppose a salaried employee holds a position that does not entail supervisory duties or the exercise of independent judgment. In that case, they would likely fall under the non-exempt category, regardless of their salary status. These employees would then be entitled to the provisions for minimum wage and overtime pay as prescribed by the FLSA.
FLSA exemption requirements
Determining if an employee is exempt from the FLSA’s requirements is no trivial task. It calls for careful legal analysis, considering the nuances of each role and its associated duties. Often, this examination requires direct interaction with the business and its employees, enabling a comprehensive understanding of job functions and responsibilities.
In other words, whether you must pay your employee minimum wage and overtime pay is not determined by whether he or she is salaried, but on the type of position and the scope of its responsibilities. Whether your employee is exempt from the requirements of FLSA requires a careful legal analysis; we can help you with this by visiting your business and talking with you and your employees. Contact us today by clicking here.