- Blog post
Five key factors you must consider in exempt employee definition
Make sure the job’s ‘primary duty’ supports your classification under FLSA guidelines
The stakes for getting the exempt employee definition right are high indeed. You’re more likely than ever to face wage-and-hour claims, as employees and plaintiffs’ lawyers catch on to their lucrative potential. One area presents special challenges as you decide whether managerial or administrative employees are exempt employees. That area: the “primary duty” test.
WHAT TO LOOK AT
Federal law says that to be exempt, an employee must not only be paid at least $455 a week on a salary basis, but also must be assigned a primary duty that is truly executive or administrative.
Here are five factors you should consider as part of the exempt employee definition
Does the job description support an exemption?
If the primary duty as given in the job description sounds like the primary duties of non-exempt positions, you may have trouble classifying the person as exempt.
What’s the relative importance of the exempt employee and their tasks?
This calls for a comparison: Are the person’s bona fide managerial or administrative tasks significant compared with his more routine tasks?
How much time is spent on exempt work?
Federal law doesn’t set a standard in terms of percentages, although the laws of some states – California, Wisconsin and New Jersey among them – do. Elsewhere, an employee doesn’t have to spend a majority of her time on exempt work to be exempt, but the time spent should be significant.
Is the person relatively free from direct supervision?
Truly exempt employees are able to make independent judgments. They need not have final authority, but their decisions are given weight by their superiors.
Is the salary higher than that of employees doing non-exempt work?
A significantly higher salary than that of others in the same department or team will help support an exemption, although it’s not enough by itself.
Source: “The Exempt v. Nonexempt Trap: How to Avoid It,” a Rapid Learning Institute webinar with Ed Bergmann, Seyfarth Shaw LLP. Issue 6.18 4-28-09