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Since August 23, 2004 the U.S.
Department of Labor (DOL) implemented regulations for the administration of the
Fair Labor Standards Act (FLSA). The regulations provided updated criteria for
employers to use in determining which employees are subject to or exempt from
the overtime provisions of the Act.
Employees who are subject to
overtime and record-keeping stipulations mandated by the FLSA regulations are
considered non-exempt; employees who have an exempt FLSA
regulations status are not covered by the overtime and record-keeping
requirements of the Act. The Department of Labor considers all employees
subject to overtime and minimum wage requirements unless their positions have
been specifically determined to be exempt. This exemption is based on an
evaluation of the employee's duties and responsibilities, which may offer an
exemption if the position is considered executive, administrative,
professional, or in certain computer-related occupations.
The Department of Labor and US
Courts interpret the FLSA regulations by first assuming that employees and
positions are nonexempt. Therefore, the employer is required to demonstrate
that exempt status can be substantiated based on the Department of Labor's
narrow exemption criteria.
At ECU the Division of Human
Resources' Department of Classification and Compensation makes the
determination of FLSA regulations status. The determination is based on the
nature and the requirements of work performed and are not directly related to
job title, salary grade, or EHRA/ SHRA (Exempt from or Subject to the State
Human Resources Act) status. Failure to comply with the FLSA regulations
carries substantial legal risk.
The above mentioned updated criteria
produced a format which is more easily understood. The primary purpose of the
new regulations is to ensure that employees are properly classified in regards
to being eligible or not eligible for overtime and receive proper pay for the
number of hours they work. The rules have been designed to “end the confusion
that has led to an explosion of class action lawsuits that failed to protect
Some of the highlights of the regulations
are as follows:
Employees must be paid at least $455
weekly ($23,660 annually) in order to qualify for executive, administrative,
professional or computer job exemption (not subject to the provisions of FLSA and
therefore not required to complete weekly time records). This change appears to
render even part-time employees making less than this amount automatically
subject to FLSA, but this is a specific point still to be clarified prior to
Exemptions will not apply to “first
responders" including all law enforcement, firefighters, paramedical and
Exemptions will not apply to “blue
collar” workers involved in production, maintenance, construction or similar
A short-form exemption test for
highly compensated employees whose total cash compensation is at least $100,000
annually has been established.
The Executive Exemption requires and
defines the authority that employees must have in regards to personnel decisions
regarding their subordinates; namely, that an executive must have the
“authority to hire or fire,” or have their suggestions as to the “hiring,
firing, advancement, promotion, or any other change of status given particular
The Administrative Exemption
requires independent judgment and discretion in matters of significance.
The Learned Professional Exemption
is available only for employees who have attained advanced knowledge through
intellectual instruction or a combination of experience and instruction which
enables them to perform the same work as degreed professionals.
The regulations allow employers
under certain circumstances to make deductions in pay from exempt employees
without affecting their exempt status.
The regulations do not apply to
teachers (faculty), lawyers or doctors, full-time or part-time.