The Fair Labor Standards Act (FLSA) is often misunderstood or misinterpreted, and the penalties can be significant. It is important that companies understand the exemption rules and appropriately classify their employees under the law.

First thing’s first. What is the FLSA? According to the Department of Labor, the Fair Labor Standards Act “establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.” 

Simply put, this means that any employee who works more than 40 hours per week must receive overtime pay unless that employee is exempt under the FLSA.

Exempt vs. Non-Exempt

All employees are eligible for overtime pay unless they meet all three of these criteria:  

1. They are salaried, not hourly, employees.
2. Their salary is greater than $684 per week or $35,568 per year. 
3. Their position falls under one of seven exemption categories.

If any one of these criteria is not met, then the employee is not exempt from the law and must be paid overtime pay. Let’s take a closer look at each of these pieces. 

Salary

Knowing whether your employee is paid a salaried or hourly wage is simple. But when it comes to the amount paid, that can be a little trickier to determine in some situations. 

For example, commissions count in some situations but not others. If you have an outside sales position on your team, then overtime is not required. 

However, a sales position that receives the minimum quarterly pay can count up to a specific dollar amount of their commissions toward their salary pay, in which case they may not be exempt from being paid overtime. 

Knowing these different scenarios is essential to ensuring your business is in compliance with the FLSA. 

Job Duty Exemptions

There are seven categories that qualify as exempt and, therefore, do not qualify for overtime pay. Those categories are as follows: executive, administrative, professional, computer, outside sales, and highly compensated employees. 

For each of these categories, there are certain criteria that must be met in order for the employee to be considered exempt. Let’s take a closer look. 

Executive Exemption

Executive Exemption is just what you might think. The people in the executive and management roles within a company or organization. These are the people in charge of multiple departments, oversee many employees and have the ability to hire and fire people. 

For the exact criteria specifications, take a look at the DOL fact sheet here.

Administrative Exemption

Just like with Executive Exemption, Administrative Exemption also has a set of criteria to qualify. These employees are your office and non-manual employees whose work directly relates to the overall management and general business of the employer. Some examples of positions like this would be anyone in accounting and finance, the marketing and advertising departments and anyone in human resources.

Here’s the DOL fact sheet with exact details regarding Administrative Exemption.

Professional Exemption

The Professional Exemption lays the foundation for “learned professions” that typically require a person’s discernment and judgement to maintain their role responsibilities. The employees that fall into this exemption often have a post secondary education certificate in at least one specialized area of knowledge. Examples include: practicing law, medicine or teaching. 

For detailed information on this exemption, check out this DOL fact sheet. 

Computer Employee Exemption

The Computer Employee Exemption extends to your computer programmers, software engineers and those of similar duties. These are the employees who are creating software and programs that are essential to the company’s function. It does not include those who repair or computer hardware or other technological equipment. 

Find the fact sheet here.

Outside Sales Exemption

To qualify for the Outside Sales Exemption status, the employees main function must be to make sales or obtain orders which is typically done away from the typical place of employment. This could include product sales, services or advertising. 

This Exemption category could pose as a little more tricky than some of the others, simply due to the vast variety of sales positions that are out there. Lucky for us, the DOL made a fact sheet for this one, too.

Highly Compensated Exemption

Last but not least, we come to Highly Compensated Employees. While some people may think this would fall under the same criteria as the Executive Exemption, that is not the case. To qualify for Highly Compensated Exemption, the employee must regularly direct the work of at least two other employees and meet a minimum salary requirement, even if they don’t meet the other criteria outlined in Executive Exemption. 

The full details on the distinction between Executive and Highly Compensated can be found here.

At the end of the day, it’s a pretty safe bet to guess that the majority of your employees will fall into the “Non-Exempt” category. But having a good grasp on the difference between the two is of the utmost importance.

While all of these different exemptions might seem tedious to comb through, it is absolutely essential that your company understands these details and abides by the law set forth. As usual, People Solutions Center is here to help. Contact us today! 

The Coronavirus pandemic has brought forth a long list of challenges for most industries. There is a lot of uncertainty as we fight to maintain some sense of normalcy in our daily lives. As a business owner, you may be considering reopening your business after months of being shut down or wanting to bring your employees back to the office. 

The best way to ensure a smooth transition for your team is to familiarize yourself with the most recent pieces of legislation regarding the pandemic. The Families First Coronavirus Response Act addresses how employers should respond when their employees’ jobs are affected by COVID-19. 

 

Emergency Family and Medical Leave Expansion Act

As stay-at-home orders are being lifted, many employees will face the challenge of finding childcare. With many parents facing fall classes in a virtual environment, creative solutions for scheduling, as well as leveraging legislative options, have become critical. The Emergency Family and Medical Leave Expansion Act contains provisions for employees who are unable to work or telecommute due to the child’s school or care provider being closed.

For businesses with less than 500 employees, each worker is entitled to 12 weeks of paid job protection – equal to two-thirds the rate of pay for full-time employees and 100% of the rate of pay for part-time employees, based on the average of hours worked in the previous six months. After the 12 week period is over, it is your responsibility to place them back into their original position.

If your company has less than 50 staff members, you may qualify for exemption if paying such leave to employees would jeopardize the viability of your business. 

 

Emergency Paid Sick Leave Act

This law contains provisions for employees who have been advised by health care providers to self-quarantine. If they need to take time off to care for themselves or someone who is experiencing health complications possibly linked to COVID-19, these employees are entitled to 80 hours of paid sick leave. If they need time off to care for themselves, employees are to be paid their regular rate and two-thirds their regular pay rate if they are caring for another person showing symptoms.

Although implementing these recent laws may sound overwhelming, there is a bright side to it  all. All the payments made as a result of these two acts are eligible for tax credits. 

People Solutions Center is here to help as you think about the implications these laws may have on your businesses. You need to be informed in order to make the best decisions as you prepare to reopen your business during these difficult times. We can help fill in the blanks so you only worry about what matters most – driving your company. Contact us today, you don’t have to navigate this journey alone.

A chain is only as strong as its weakest link. This same concept applies to the operations of a company – each team member is a link that holds the company together. As a leader, you not only have the responsibility and moral obligation of creating a productive and safe work environment for your employees, but you are also expected to promote creativity and innovation within your organization. Checking all of these boxes requires more than simply implementing safety procedures and adhering to the minimum HR requirements. Set your team up for success by prioritizing diversity, equity and inclusion initiatives within your business. 

Your employees are your most important asset – investing in the right resources for them to achieve professional success is a great start to ensuring you increase your bottom line. With the help of People Solutions Center’s workplace and diversity training, your company can leverage the unique traits and backgrounds of your team members to boost company morale and increase your bottom line. 

 

Complementing a Culture of Diversity 

Diversity is more than just a percentage. When we think about diversity, we likely picture a group of people composed of different ethnicities, ages or genders. However, some features that can help you diversify your workforce are invisible to the naked eye. While having people on your team with different backgrounds or ethnicities is a great start, your company can only truly embrace this culture of diversity by complementing it with a culture of respect, equity and inclusion. 

When you hire a person who can speak another language or is familiar with another culture, you are diversifying your team by simply giving them a seat at your table. This checks the most basic HR requirement as an equal opportunity employer. 

As an innovative leader, however, you must ensure this new employee becomes a contributing member of your organization. How do you do that? You give this employee a voice that is not only acknowledged and respected, but also heard and valued. When you achieve this, you will have effectively created a sense of belonging for your team members. It’s indisputable that happy employees are loyal, high performing employees. 

 

Barriers You May Encounter

 

 

Hiring people with unique experiences, beliefs, education, thinking styles and socioeconomic backgrounds sounds like a great step forward for almost any company from a competitive standpoint. When you gather people with unique qualities to work for your company, you create a melting pot of ideas and perspectives – the perfect formula for innovation. Unfortunately, there are still some barriers you may face as you navigate the process of implementing diversity initiatives. 

When interviewing candidates, first impressions are everything. Within the first few seconds, you have subconsciously made judgments about someone based on their visible characteristics such as the clothes they’re wearing, skin color or ethnic background. This is called an unconscious bias and can often lead us to make the wrong decisions when interviewing a candidate. 

Privilege is another obstacle candidates may face when looking for a job. This is an advantage a person is entitled to, due to no effort of their own. For example, a person born into a wealthy family has the privilege of being financially stable enough to afford an expensive education, as opposed to a person who comes from a family with limited financial resources. Better paying jobs are more likely to require a college degree. Recognizing that privilege exists can help your management team better equip their team members with the tools they need for success. 

 

Creating Prosperity In The Workplace

 

Similar to how unconscious bias enables us to make unfounded assumptions about a person without intentionally doing so, microaggressions are negative prejudicial slights or insults toward any group of people oftentimes not meant to be offensive. An example of a microaggression could be a coworker describing their superior as being knowledgeable in sports, despite being a woman. At minimum, this creates a barrier to folks feeling like they belong – at worst, it creates a hostile work environment. 

With proper training in diversity and inclusion from People Solutions Center, your management team will learn to break that unconscious bias and learn how to identify the candidates with unique qualities that could make them an asset to your company. We can help you create a culture of belonging within your organization by making your employees feel like they’re not only included, but also celebrated. Do not settle for meeting the minimum HR requirements of being an equal opportunity employer. With the help of People Solutions Center, you can provide your company with team workshops that facilitate growth and trust while nurturing diversity, equity and inclusion in the workplace.