Exempt From FLSA
The Fair Labor Standards Act (FLSA) helps employers the power to hire and release employees. Employers can use non-discretionary lagniappes and inducement payments (including commissions) and pay 10 percent of the normal payment level each time, according to FLSA laws.
The Fair Labor Standards Act (FLSA) made a distinction between two employees of the company or organization: exempt and non-exempt. Non-exempt employees must record their weekly working hours and must pay overtime wages. The amount of overtime wages is 1.5 times the normal wage for working hours over 40 hours per week.
Most of the non-exempt employees are paid by the hour, but there are also some employees who are paid by the wage, or by piece rate, commission or a combination of various wage methods. Although some employers ask for exemption of employees from recording their working hours, many do not. An exempt employee who work more than 40 hours a week will not be paid overtime.
An employee who was considered as exempt according to FLSA, must be paid on a salary basis, as well as exempt job duties.
Salary Basis refers to the fixed salary that employees receive, regardless of the number of hours they work. Starting from January 1, 2020, the FLSA’s minimum wage is $36,568 per year (or $684 per week). The FLSA regulations allow employers to use non-discretionary bonuses and incentive payments (including commissions), and pay 10% of the standard salary threshold each year.
Exempt job duties: According to FLSA, employees who are considered to be exempt, their job duties must also be exempted duties. This type of analysis is called the “duties test.” According to the FLSA, exempted jobs are generally divided into five main categories, but there are also other miscellaneous exemptions. The five main exceptions are administrative, administrative, professional, computer and external sales staff. The main job responsibilities of each category of employees are summarized as follows:
Executives: An executive who can be exempted. His job responsibilities must be to manage the company, or to manage the generally recognized corporate departments or branches. He must also habitually supervise at least two full-time employees or equivalent on a regular basis, and the employee must have the right to hire and fire employees (or their suggestions receive special attention).
Administrative: Administrative employees who can be exempted must be people working in the office or engaged in non-manual work, and the nature of their work must be directly related to the company’s management or general business operations of the employer or the employer’s customers. Employees must exercise discretion and independent judgment on important matters
Professional: A professional employee who can be exempted must be engaged in work that requires advanced knowledge in science or the field of study, and the advanced knowledge must usually be acquired through long-term professional studies.
Computer Employee: The computer employees who can be exempted must be engaged in work as a computer system analyst, computer programmer, software engineer, or other similar technical personnel in the computer field. Their main responsibilities must include the application of system analysis techniques and programs, design, development, recording, analysis, creation, testing based on users or systems design specifications and related computer system and program or modification and machine operating system related computer program design, recording, testing, creation or modification. Even a combination of these responsibilities .
External sales employee: The external sales employee who can be exempted must be engaged in work with the primary responsibility for sales or obtaining service orders or contracts, and the employee must habitually and regularly work outside the employer’s premises.
The bill is called the FLSA for two reasons: one is to protect the employees of the company or organization from being required to work long hours without adequate compensation; the other is to prevent employers from overworking existing staff as an incentive to hire new ones. Essentially, the purpose of the FLSA is either to prevent those who currently have jobs from working long hours, to provide more job opportunities for the unemployed, or to provide employees with higher income.