Because FLSA is federal legislation, it is logical that think that it would apply across the board to all employees. However, the reality is more complicated than that with numerous factors coming into play.
FLSA — or the Fair Labor Standards Act — is designed to provide certain protections to workers. The federally-mandated legislation governs concepts such as the maximum hours that can comprise a work week, child labor, overtime pay, minimum wage and overtime pay. Though it is handed down by the federal government, it is not a one-size-fits-all solution that applies to every situation. Here are three things you need to know about FLSA.
1. FLSA allows for exclusions
The FLSA provides two types of exclusion from its mandates. Because most railroad workers are bound by the stipulations contained within the Railway Labor Act — which is a federal labor law unique to them — they are not governed by the FLSA. Another type of exclusion involves most agricultural workers and movie theater employees. For example, they are not covered under the FLSA rules for overtime.
2. FLSA divides jobs
Employees who work in jobs that are bound by the mandates of the FLSA are separated into either exempt or nonexempt status. Exempt employees are not entitled to overtime pay while nonexempt ones are. In most cases, employees are exempt or nonexempt based on the type of work they do, the amount they are paid and how they’re paid. Though most employees are nonexempt, an example of a well-known job that is likely to be exempt is one in outside sales.
3. Exempt employees must meet three criteria
Other stipulations that can make a job exempt include performing job duties that are exempt, being paid as a salaried worker and earning an annual wage of at least $26,500. In nearly all cases, these exempt employees are not entitled to overtime, according to the FLSA rules. For most people, all three of these criteria must be met for them to be exempt from the mandates of FLSA, as explained below.
- The salary test means that, in general, an employee must be guaranteed a set amount of pay for each week that employee did any amount of work.
- Exempt job duties are typically categorized in one of three ways: professional, executive or administrative. Professional job duties are those included within the professions of doctors, lawyers, teachers and accountants while executives typically have a management and supervisory role. Generally, administrative job duties are considered to be non-manual in nature with office work as a conventional example.
- The salary level test for exempt employees mandates that they must earn at least $23,600 per year or $455 each week. Any employee who receives less than that is nonexempt. Most employees who receive over $100,00 are also exempt.
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