FLSA

Fair Labor Standards Act (FLSA)

The FLSA was first enacted by congress in 1938 and ensures a minimum wage for workers and establishes the overtime rate for hours worked over 40 in one week. The FLSA also requires employers to accurately track and record the time worked by non-exempt workers. That is Creighton must pay its biweekly (non-exempt) employees at least the state minimum wage of $9.00 per hour and record the hours worked by these employees.

Changes to the FLSA

On May 18, at President Obama's direction, the Department of Labor (DOL) finalized its update to the overtime rule of the Fair Labor Standards Act. In total, the new rule is expected to extend overtime protections to 4.2 million more Americans by raising the minimum salary threshold of the exemption test from $455 per week ($23,660 per annum) to $913 per week ($47,476 per annum).

There is a wealth of information available on the DOL website including the following:

Exemptions from the overtime provisions of the FLSA

Executive: To qualify for the executive employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $913 per week
  • The employee's primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent
  • The employee must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of the other employees must be given particular weight

Administrative: To qualify for the administrative employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week
  • The employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
  • The employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance

Educational Establishments and Administrative Functions

The administrative exemption is also available to employees compensated on a salary or fee basis at a rate not less than $913 a week, or on a salary basis which is at least equal to the entrance salary for teachers in the same educational establishment, and whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment.

Learned Professional: To qualify for the learned professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week
  • The employee's primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction

Creative Professional: To qualify for the creative professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week
  • The employee's primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Highly Skilled Computer Employee: To qualify for the computer employee exemption, the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour
  • The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
  • The employee's primary duty must consist of:
    • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications
    • The design, development, documentation, analysis, creation, testing or modifications of computer systems or programs, including prototypes, based on and related to user or system design specifications;
    • The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
    • A combination of the aforementioned duties, the performance of which requires the same level of skills