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FLSA Exemption Criteria
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March 10, 2008
On July 24, 2004, the United State Department of Labor issued new rules regarding eligibility for overtime under the Fair Labor Standards Act. The new rules will go into effect on August 23, 2004 unless some unexpected action by the Congress occurs to block implementation. As of this date, there have been attempts to block implementation but nothing, as yet as passed. Even if Congress does act to block implementation, the President has indicated that he will veto any such attempt thereby requiring Congress to muster a 2/3 majority which, to date, has not been possible.
Following this introduction, you will find a checklist that outlines the various tests for exemption that have been outlined in the new rules. The new rules are easier to follow and determining the exemption status should be much easier than it has been in the past for many jobs. In applying the applicable tests to the job, it is important that you have a thorough knowledge of the job in question including its essential duties and the required knowledge and skill needed to perform the work. This will involve a thorough analysis of the individual position or, potentially, all positions within the job classification. You will need the information to appropriately determine whether the duties meet the criteria specified by the Department of Labor. Failure to correctly determine the exemption status can result in substantial additional cost to the employer; either through paying overtime to positions that could be exempt or incorrectly exempting a position or job classification thereby subjecting the employer to substantial back pay and penalties should the affected employee ever dispute their exemption status.
Fox Lawson & Associates LLC can assist you in analyzing the work performed by individual positions or groups of positions and then recommend the appropriate FLSA exemption status, should you need assistance in performing these tasks.
Exemption Worksheet (All Tests)
Employee:
Job Title:
Department:
Date:
The employee must meet all of the requirements of one of the exemption tests as outlined below to be eligible for exemption under the FLSA. (Employees earning more than $100,000 in total annual compensation are only required to customarily and regularly perform one of the exempt duties of the Administrative, Executive, or Professional tests.)
Please indicate the exemption test that applies to this employee and complete the corresponding exemption test matrix below:
| Administrative | Executive |
| Learned Professional | Creative Professional |
| Computer Professional | Outside Sales |
|
Administrative Exemption: |
|||
|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
$455/week |
||
|
Duties |
Primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers Exercises discretion and independent judgment with respect to matters of significance |
||
|
Executive Exemption: |
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|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
$455/week |
||
|
Duties |
Primary duty of managing the enterprise or a recognized department of subdivision Customarily and regularly directs the work of two or more other employees (or their equivalent) Has the authority to hire or fire other employees (or whose recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight) |
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|
Learned Professional Exemption: |
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|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
$455/week |
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|
Duties |
Primary duty of the performance of work requiring advanced knowledge, defined as work, which is predominantly intellectual in character and includes work requiring the consistent exercise of discretion and judgment Advanced knowledge must be in a field of science or learning Advance knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction |
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|
Creative Professional Exemption: |
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|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
$455/week |
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|
Duties |
Primary duty of the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic endeavor |
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|
Computer Professional Exemption: |
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|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
$455/week or $27.63/hour |
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|
Duties |
Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field performing the following duties:
|
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|
Outside Sales Exemption: |
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|
Requirement for Exemption |
Does employee meet the requirement? |
Describe how employee meets the requirement |
|
|
Salary |
None Required |
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|
Duties |
Primary duty of making sales (any sale, exchange, contract to sell, consignment for sales, shipment for sale or other disposition including the transfer of title to tangible property, and in certain cases of tangible and valuable evidences of intangible property), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client of customer The employee must be customarily and regularly engaged away from the employer’s place or places of business |
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