In 2014, the Whitehouse announced plans to make sweeping changes to the current overtime protections. As of now, no formal decision has been made, but news outlets are claiming the rules will go into effect later this year. And while there are still possible changes, the current proposed rules include:
So what are the current rules for correctly classifying employees as either exempt or non-exempt?
There’s actually a long list of rules and exceptions you can find on the DOL’s website, but here are the main ones:
Non-exempt employees are covered by the FLSA and must receive overtime pay—at least one and a half times their regular pay rate—for any time they work over 40 hours within a workweek (seven consecutive 24-hour periods).
On the other hand, exempt employees are not entitled to overtime pay. To qualify for exempt status an employee must:
There are several job classifications that can qualify for exempt status. Here are three of the most frequently cited:
These classifications and job duties are important for employers to pay attention to because violating the Fair Labor Standards Act’s (FLSA) wage and hour rules is a very costly mistake—one that’s on the rise.
According to corporate law firm Seyfarth Shaw LLP, “In federal court, employers are more likely to face wage and hour claims than any other form of employment litigation.” The firm also compiled the data on cases filed in federal court and found, “the annual wage and hour caseload spiked 7.6%—to 8,781—in FY15.”
In our next blog, we are going to discuss what steps you can take to maintain compliance. In the meantime, if you’d like to learn more about our wage and hour law training that covers how to properly classify employees, schedule a demo today.
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