FLSA Status

What Is FLSA Status?

FLSA Status describes whether an employee is classified as exempt or non-exempt in their role. The category an employee falls under can affect their rights in the workplace.

The Fair Labor Standards Act (FLSA) safeguards US workers and covers employment standards in federal, state, and local governments.

The FLSA establishes the following:

• Minimum wage
• Overtime pay criteria
• Recordkeeping guidelines
• Youth employment standards

The standards outlined by the FLSA apply to workers at the federal, state, and local government levels, as well as the private sector.

FLSA Meaning: What Does FLSA Stand For?

FLSA stands for the Fair Labor Standards Act—a US law that safeguards employees against unjust pay and workplace practices. Governed by the US Department of Labor (DOL), this law has undergone several changes since it was enacted in 1938.

When the FLSA was first passed in 1938, the minimum wage was $0.25. While the current federal minimum wage is $7.25 per hour, individual states can offer higher minimum wages—for example, the District of Columbia (D.C.) has a minimum wage of $17.50 per hour—so it’s essential to know what the minimum wage is in your state.

What are Exempt and Non-Exempt Employees?

Non-exempt means employees are protected and should be paid at least the federal minimum wage anytime they work. If employees work more than 40 hours in a week, they must receive overtime pay—which is at least 1.5 times the employee’s normal rate.

Exempt employees, however, aren’t eligible for overtime pay. This means the provisions set by the FLSA don’t apply to the roles these employees are in.

Whether an employee has exempt or non-exempt employment status depends on several factors. To determine an employee’s FLSA status, HR administrators, payroll specialists, and business owners need to consider the following:

• How much the employee makes weekly or annually
• How they’re paid by the employer (salary or hourly)
• The employee’s role and occupation

Types of FLSA Exemptions

The regulations around exempt employees and the specific roles that may fall under this description are subject to minimum earning thresholds and other specific guidelines. The Department of Labor offers additional insights into these positions and others that may apply to your business.

Generally, an FLSA exemption is determined by the job role and the types of duties expected of it. Typically, these are salaried employees and include the following:

• Executive-level personnel
• Administrative employees
• Professional employees (i.e., advanced knowledge workers)
• Outside sales team members
• Employees in certain computer-related fields

Non-exempt Employee

A non-exempt employee is subject to the minimum wage and overtime provisions under the FLSA. The FLSA also offers regulations specific to direct care workers (e.g., caregivers, home health aides, certified nursing assistants, and more).

Plus, businesses in some areas must adhere to additional provisions for non-exempt employees, such as a state minimum wage. Employers may consult the DOL’s Wage and Hour Division (WHD) and individual state guidelines for more detailed information on how to determine workers’ exempt or non-exempt FLSA status.

It’s important to note that being salaried doesn’t guarantee an exemption from the FLSA.

How to Remain FLSA Compliant

Always be mindful of FLSA requirements to remain compliant. Keep the following criteria in mind when determining if an employee or role is exempt or not from FLSA:

• Conduct a job audit. Dive into the pay, tasks, average hours of work, and determined skill level for the job roles in your company. Knowing the duties required of each role can help you more accurately determine their exempt vs. non-exempt status.
• Check the minimum wage. You should always be aware of the minimum wage threshold for your state.
• Overtime. Even if there is a fixed requirement, you must compensate your employee for their hours worked. That means a non-exempt employee who works over 40 hours is entitled to compensation. Try to ensure employees don’t work more than the hours you set and lay out criteria for what happens if any employee works more.
• Maintain records. Keeping accurate and up-to-date documentation about job roles can make it easier to ensure you’re paying employees correctly and remaining FLSA compliant.
• Don’t assume exemption. Some jobs may seem non-exempt or exempt on paper, but specific roles can be protected even if salaried. Ensure you do a thorough assessment of job duties against FLSA compliance.