Determining administrative exemption
Misinterpreting overtime exemption provisions can be a costly mistake for employers. Companies that misclassify employees and fail to pay them overtime wages can face fines and penalties for violating the Fair Labor Standards Act (FLSA).
Many employers have faced misclassification litigation from employees who claim they were given job titles, such as financial advisor, senior specialist and financial analyst to fall under the administrative exemption, which unfairly disqualified them from overtime pay, according to Thomson Reuters.
Under FLSA regulations, employees in administrative positions are exempt from overtime pay only if the meet salary qualifications, perform certain job duties and assume specific responsibilities.
For example, employees that qualify for an administrative exemption must earn at least $455 per week, perform office or non-manual work directly related to the management of general operations of the employer or employer's customers, and be responsible for exercising discretion and independent judgement about significant matters.
While some of the determining factors are easy to understand, the job duties can be applied to a variety of positions and are more subjective. To avoid any misunderstanding and the possibility of lawsuits, businesses can keep accurate records of employees' job titles, responsibilities and pay rates and also invest in payroll services to accurately determine wages.
Many employers have faced misclassification litigation from employees who claim they were given job titles, such as financial advisor, senior specialist and financial analyst to fall under the administrative exemption, which unfairly disqualified them from overtime pay, according to Thomson Reuters.
Under FLSA regulations, employees in administrative positions are exempt from overtime pay only if the meet salary qualifications, perform certain job duties and assume specific responsibilities.
For example, employees that qualify for an administrative exemption must earn at least $455 per week, perform office or non-manual work directly related to the management of general operations of the employer or employer's customers, and be responsible for exercising discretion and independent judgement about significant matters.
While some of the determining factors are easy to understand, the job duties can be applied to a variety of positions and are more subjective. To avoid any misunderstanding and the possibility of lawsuits, businesses can keep accurate records of employees' job titles, responsibilities and pay rates and also invest in payroll services to accurately determine wages.
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