Four executive exemption traps in FLSA guidelines

by on March 31, 2009 · 0 Comment POSTED IN: HR Info Center

Here are four FLSA exemption tests that can help you make the call.

Sometimes even good companies find it difficult to figure out if a manager qualifies for the executive exemption to the Fair Labor Standards Act (FLSA).

Four common traps:

  1. Double-dipping
  2. A manager must manage two or more individuals. Multiple managers of the same small group can’t all be exempt. In FLSA guidelines, two supervisors who manage three workers really oversee one-and-a-half workers each. Neither manager qualifies as exempt.

  3. Not enough authority
  4. Another way to decide if a manager is exempt: The person has either direct authority to hire or fire or “particular weight” in such decisions. The manager who only makes occasional, informal recommendations is not exempt. “Particular weight” means making hiring and firing recommendations part of the manager’s job duties. And senior execs request and rely upon such regular recommendations.

  5. Not a permanent unit
  6. Managers must supervise a permanent business unit, subdivision or group of employees. Thinking managing a collection of employees on a temporary project qualifies. It doesn’t.

  7. Below pay threshold
  8. Remember that FLSA guidelines specifiy a threshold level of pay for anyone who qualifies as an exempt manager. The Manager’s pay must meet the salary threshold of $455 a week, or $23,660 a year.

    Based on an audioconference by Russell Gore, The Exempt vs. Non-Exempt Trap: 10 Keys to Avoiding Overtime Fines, 4/27/06.

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