Common Exemptions from FLSA Overtime and Minimum Wage Laws

While there are many exemptions, the ones below are the most common. It is important to know that each element of each exemption must be met in order for the employee to be exempt from FLSA overtime pay or minimum wage protections and that the employer, not the employee, has to prove each element of the exemption. In other words, the employer has to prove it does not have to pay overtime wages or minimum wages as opposed to the employee having to prove he or she is entitled to those wages.

In evaluating your exemption status, please know that job titles are not controlling. For example, there is an exemption called the “executive exemption.” However, just because your employer may assign you a job title as an executive employee, that does not mean you are not entitled to overtime and minimum wage protections. As stated in the FLSA regulations for many of the most common exemptions:

A job title alone is insufficient to establish the exempt status of an employee. The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee’s salary and duties meet the FLSA’s requirements of the regulations. 29 C.F.R. § 541.2

The following are some of the more common FLSA exemptions. While you can see the specific test for each exemption by clicking on the links below, please know that a common element most FLSA exemptions share is that the employee be paid on a “salary basis.” In other words, if an employee is paid on an hourly basis, a commission only basis, or a day rate, that employee will generally be entitled to overtime and minimum wage pay under the FLSA. There are some exceptions to that salary rule, so it is best to consult with a Baron & Budd attorney for an initial consultation at no cost to you to learn more.

Administrative Exemption

Computer Professional Exemption

Executive Exemption

Highly Compensated Employee Exemption

Motor Carrier Act Exemption (e.g. long haul 18 wheeler drivers)

Outside Sales Employee Exemption

Professional Exemption

Retail or Service Establishment Exemption

Employees Versus Bona Fide Independent Contractors

Only employees are protected by the FLSA’s overtime and minimum wage laws. However, it is widely recognized that many companies are labeling workers as independent contractors in order to avoid not only the payment of overtime or minimum wages, but also to attempt to avoid health care benefits, retirement benefits, unemployment benefit taxes, workers compensation insurance benefits, Social Security taxes, and other state and federal payroll taxes.

However, the FLSA recognizes that employers may try to misclassify workers as independent contractors in order to avoid paying overtime or minimum wages, so there is a special test to determine if a worker labeled as an independent contractor is really an employee entitled to FLSA protections. While that test is explained in more detail on the independent contractor misclassification page, it is important to know that you cannot waive your FLSA employee rights. So, even if you sign a contract stating that you are an independent contractor, get paid for your work through a company you set up, or even write off business expenses on your taxes, you may still be considered an “employee” for purposes of entitled to overtime and minimum wages under the FLSA.

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