The Fair Labor Standards Act (FLSA) is an important piece of labor legislation designed to protect the rights of employees and ensure fair treatment throughout the workplace. Employees and employers must be aware of what their FLSA classification is. An employee is either FLSA exempt and FLSA non-exempt. So how do you know the classification status of your employees? Keep reading!
Employee Classification and the FLSA
First, let’s take about the FLSA. In 1938 the FLSA law established minimum wage, overtime compensation, and child labor regulations. It also established two types of employee classifications: FLSA exempt and FLSA non-exempt. If an employee is exempt from some FLSA requirements or is eligible for overtime pay, it depends on their classification.
FLSA Classification: Exempt Employees
Exempt employees under the FLSA are those who are not subject to certain FLSA regulations, such as those relating to overtime compensation. The following are the main traits of FLSA exempt workers:
Salary Basis: No matter how many hours they work, exempt employees normally earn a fixed salary as opposed to hourly pay.
Responsibility: If the exempt workers’ primary responsibilities are executive, administrative, professional, or extremely sophisticated computer-related tasks, they could be exempt. These roles frequently include responsibility over decisions, oversight, or specialized knowledge.
Exemption Tests: In order to be considered exempt from the FLSA, a worker must pass tests related to compensation amount, salary basis, and job tasks. For instance, as of 2021, the pay threshold for exempt employees is established at $35,568 annually.
FLSA Classification: Non-Exempt Employees
All FLSA provisions, such as those governing minimum wage, overtime compensation, and child labor laws, apply to FLSA non-exempt workers. The most important characteristic of FLSA non-exempt workers is:
Hourly Pay: Non-exempt workers often receive hourly pay, which entitles them to at least the federal minimum wage for each hour worked.
If an Employee is Non-exempt, They’re Entitled to:
Pay for Overtime: Non-exempt workers are entitled to overtime pay at a rate of 1.5 times their regular hourly rate for each additional hour worked over the required 40 in a workweek.
Minimum Wage Protection: To ensure that all employees are paid fairly for their job, both FLSA exempt and non-exempt workers must receive at least the federal minimum wage.
Legal Remedies: When the FLSA is broken, employees have the right to file a lawsuit to recover unpaid wages, unpaid overtime, and other labor law transgressions.
Education and Awareness: To ensure they are treated fairly at work, employees should be aware of their rights under the FLSA and stay up to date on any revisions or changes to labor laws.\Protecting worker rights and enforcing FLSA compliance by companies depend on employers understanding the difference between exempt and non-exempt employees. Here are some crucial factors to remember:
Keeping correct records of non-exempt employees’ working hours, pay, and other employment-related information is necessary for employers to comply with FLSA laws.
We’re Here to Help
Determining FLSA classification status can sometimes be tricky. It can be even more confusing when it comes time to calculate overtime pay and wages. That’s where we come in! Let us be your payroll experts, so you can focus on running your business. Give us a call to get the process started! Call us directly at (804) 364-7220 or get an instant payroll pricing quote. We look forward to working with you!