FLSA Exempt Test

Employees must take the FLSA Exempt Test in order to qualify for exemption under FLSA. An employee must be able to meet certain tests as to their job duties and be paid on a salaried basis at no less than $913 a week. Employees must also meet the duties test to be considered as exempt. Job titles do not determine exempted status.

Exclusions from FLSA coverage

Certain jobs may have a complete exclusion from coverage under the overtime rules of the FLSA. There are two types of complete exclusion, and some jobs are specifically excluded from the statute. Another kind of exclusion regards jobs that are governed by another specific federal labor law. If that job is governed by a specific labor law, the FLSA does not apply.

Exempt or Nonexempt

Employees whose jobs are covered by the FLSA are exempt or nonexempt. Most employees are considered nonexempt based on what they are paid, how they are paid, and the type of work they do. A nonexempt employee must be paid minimum wage and overtime pay for any hours worked beyond 40 hours in a single week. Overtime pay is one and a half times the employee's regular hourly rate. A nonexempt employee that is treated as exempt in that they're off the clock hours are not properly recorded and compensated has the right to file an overtime claim with the FSLA.

Salary Basis Test

An employee is considered paid on a salary basis if they have a guaranteed minimum amount of money they are paid when they perform their job duties. Base pay cannot be reduced if an employee performs less work than normal or the quality or quantity of their work suffers for various reasons. An employer can dock the base pay for disciplinary suspensions, personal leave, sick leave, and any other leave the employee may have taken. None of these salary reductions change the status of an exempt employee.

The Duties Test

An employee who can meet the salary level and salary basis tests is considered exempt only if they also perform exempt job duties. Exemptions are typically limited to employees who perform at a high level of work. They fall into three categories that include:

  • Executive
  • Professional
  • Administrative

Exempt Executive Job Duties

Job duties are considered exempt executive job duties if the employee regularly supervises two or more employees and also has management as the primary duty of the position. They may have input into the job status of other employees such as hiring, assignments, termination, or promotions. Someone who is just a supervisor and has little to no oversight of employees is not considered exempt.

Exempt Administrative Job Duties

A special rule for business owners involves an employee who owns at least 20 percent equity interest in the business in which they are employed, regardless of the type of business organization and who is active in its management. This person is considered a true exempt executive.

The employee's main job must include the performance of duties that include non-manual work that relates to the management or general business operations of the employer or the customers of the employer to qualify for this exemption. It's designed for high-level employees whose primary job duties are to keep the business in operation. Some examples of included titles position include:

  • Human Resources
  • payroll and Finance
  • Records Maintenance
  • Tax and Accounting
  • Quality Control
  • Public Relations

Exempt Professional Job Duties

Professionally exempt includes people who work in fields that are primarily intellectual, have specialized education, and requires the exercise of discretion and judgment. They must have an education that extends beyond high school and college in fields that are different from mechanical arts or skilled trades. An advanced degree is not necessary if the employee has attained a similar level of education through other means such as on the job training and experience.

Rights of Exempt Employees

An exempt employee has almost no rights at all under the overtime rules of the FSLA. The only thing an exempt employee is entitled to under FLSA is receiving the full amount of the base salary in any work period in which they are performing their work duties. The FLSA does not stop an employer from requiring an exempt employee to clock in or make up lost time due to absence. Exempted employees may have rights under other laws than the FSLA through other laws, employment policies, or contracts.

If you need help with the FLSA exempt test, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.