Important: On Jan. 1, 2020, the Salary Level required for salary-exempt employees increased from $23,660 ($455 per week) a year to $35,568 ($684 per week). If you are not paying your salary employees a salary of at least $35,568, then you may be at risk.
FLSA Salary Exemption Overview
The Fair Labor Standards Act mandates that all employees who work more than 40 hours a week be paid time-and-a-half unless they are exempt.
How does an employee become exempt from overtime? They must meet three criteria known as the Job Duties, Salary Basis, and Salary Level tests. The Department of Labor has helpful “Fact Sheets” for those seeking more information.
Job Duties
The assignment of certain tasks per the employment can prevent an employee from being eligible for overtime. The most common exempt job duties are for those in administrative, executive or professional jobs. It is important to know that blue-collar work is never exempt from overtime.
Salary Basis
While this may seem to overlap with the Salary Level test, it does not. The Salary Basis requirement states that if someone is paid a salary, they will get the same pay each week regardless of the hours worked or the quality of the work produced. In other words, if someone does not come to work on time or leaves early, you cannot dock their pay if they are truly a salaried employee.
Salary Level
Lastly, per the statute, there is a base salary an employee must receive to be exempt from overtime. Effective January 2020, the minimum Salary Level is now $684 a week or $35,568 a year. In addition, employees can now satisfy a maximum of 10 percent of the new standard salary level using non-discretionary bonuses and incentive payments.
As the employer, there are common mistakes that are, for the most part, avoidable. You want to make sure you do not accidentally classify an employee as exempt, and, as a result, not pay the employee a certain salary nor at the appropriate salary level.
If this happens, you may be liable (dating back three years, as you must track employee pay records for that period) for that employee’s time and expected to pay a half overtime pay. Even worse, the employee could take further action by involving lawyers and doubling the amount owed.
Additional mistakes include:
• Failing to ensure that the employee performs exempt job duties, such as falsely believing that paying someone a salary equals exemption from overtime.
• Properly classifying an employee yet failing to remain up to date with legal proceedings that could change overtime eligibility.
• Properly classifying an employee yet failing to consider changes to the employee’s position that include non-exempt job responsibilities.
Now, you might be wondering, “What can I do to prevent this?”
Counxel Legal Firm can assist you with an employee audit to make sure that your employees are properly classified as exempt or non-exempt. We are here to help!
Contact Counxel Legal Firm
Contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.
This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.
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