Exemptions from Overtime Pay
It is true that overtime laws do not apply to some types of employees. Those employees, known as “exempt,” will not receive overtime pay even if they work more than 40 hours a week.
Whether or not you are “exempt” usually depends on the kind of work you do. Employees who are exempt from (not covered by) overtime laws usually have a lot of responsibility within a company and have significant input into how that company is run.
However, you are not exempt just because your employer says you are exempt or because your employer gives you a certain title or pays you in a certain way. Exemptions from overtime law generally fall into five major categories. All five are described below.
This discussion is limited to rights under the Fair Labor Standards Act (the “FLSA”). Exempt employees may have rights under other Federal laws, state laws, or by way of employment policies or contracts.
Additionally, the definitions of exempt employees are very complex, and you may not be certain if a particular category applies to your work. Even if you think you are an exempt employee, a consultation is free, so you should still consult an attorney to confirm.
1. Exemption for Professional Employees
The FLSA’s overtime requirements generally not cover employees who are considered “professional.” To be considered a professional employee, you must be licensed or certified in:
- Optometry;
- Law (generally does not include paralegals);
- Architecture;
- Medicine (generally does not include nurses);
- Engineering;
- Dentistry (generally does not include dental hygienists);
- Teaching; or
- Accounting (includes only certified public accountants).
You must also spend at least half of your work time performing duties that are typical of your profession. Finally, you must also meet the “salary basis” test, which means that you also must receive a salary that is at least twice the minimum wage for full time work.
As of January 1, 2019, for employers with 1-25 employees that is $3,813 per month or $45,760 per year, OR for employers with 26 or more employees that is $4,160 per month or $49,920 per year.
2. Exemption for Administrative Employees
To be considered an “administrative” employee, you must meet the “salary basis” test noted in #1 above. Additionally:
- More than half your time must be spent on work that is “intellectual”; and
- You are regularly allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and
- You regularly do work that is “outside the production process.”
Moreover, to be considered an administrative employee, you must do at least one of the following:
- You must regularly and directly assist the owner of the company or another manager or administrator.
- You must perform work that requires special training, experience, or knowledge without direct supervision, or with only minimal supervision.
- You must perform special assignments that require you to make decisions that affect the company with only general supervision.
If you do not meet any one of these qualifications of an administrative employee, you are not exempt.
3. Exemption for Executive or Managerial Employees
If you are an executive or managerial employee, the work you do may not be protected by overtime laws. However, you are only a managerial or executive employee if you meet all of the following qualifications:
- You spend more than half of your time either managing a distinct department or subdivision of the company or doing “managerial” work (managerial work includes doing things like assigning work to other people, supervising work, evaluating other employees, planning work, determining techniques to be used in completing work, keeping records, handling complaints, and controlling the flow of merchandise or supplies); and
- You are regularly allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and
- You directly supervise the work of two or more full-time employees. Supervision of these employees must be part of your regular job duties, and not just something you do when the regular supervisor is not at work; and
- You make recommendations about the hiring and firing of employees, and have enough authority within the company that your recommendations are given serious attention.
If you do not meet any one of these qualifications, you are not a manager and are not exempt.
4. Exemption for Union Employees
If you are a union member, you may not be protected by overtime laws because of language included in your collective bargaining agreement (CBA). If your CBA establishes a minimum wage for workers at your company that is at least 30% more than the legal minimum wage, you are exempt from overtime laws. You may have the right to overtime included in your CBA, but the terms set out in your CBA might be different from the law for non-union employees.
5. Exemptions for Specific Industries or Jobs
Finally, there are some specific categories of jobs, which are exempt from the FLSA and therefore not entitled to overtime pay. Many of the FLSA’s exclusions are listed in 29 U.S.C. § 213. Some of the excluded professions are not surprising. For example, professional athletes are not entitled to overtime.
Generally, if a job is governed by another federal labor law, the FLSA does not apply. For example, most railroad workers are governed by the Railway Labor Act, and many truck drivers are governed by the Motor Carriers Act, and not the FLSA.
Other jobs that are exempted from overtime and minimum wage requirements under the FLSA include:
Outside Sales Employees: An employee whose primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer and who must be customarily and regularly engaged away from the employer’s place or places of business. The full requirements can be found here.
Computer Employees: computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who meet certain tests regarding their job duties and rate of pay. The full requirements can be found here.
Employees Working on Commission: Employees whose pay is based primarily on sales and whose pay is a percentage of a product’s price are exempt from overtime pay but there some qualifications to this. The full requirements can be found here.
What if I am not Exempt but not Being Paid Overtime?
First, you should keep a detailed record of the hours you are working and the tasks that you perform. You should then calculate the overtime pay you are due. Second, you should contact Gulisano Law.