Most employees and employers in Florida understand that the Fair Labor Standards Act and regulations promulgated by the Department of Labor govern the circumstances under which employees are entitled to receive the federal minimum wage and mandatory overtime compensation. A lesser-known aspect of these regulations is that some employees are exempt from the mandatory overtime provisions (they are called “exempt” employees) and some are not (they are called “non-exempt employees). Because employers are not required to pay either the minimum wage or mandatory overtime to exempt employees, they often use extreme measures to classify as many employees as possible as “exempt.” Both employers and employees will benefit from an understanding of the fundamental rules for classifying employees as either “exempt” or “non-exempt.”
The basic rule
The basic rule for classifying employees as either exempt or non-exempt is easy to state: “employees employed as bona fide executive, administrative, professional and outside sales employees” are exempt from the minimum wage requirement and mandatory overtime rules. Exempt employees must also receive minimum compensation of at least $684 per week.
Many employers overlook (or ignore) the critical phrase “bona fide.” Employers often make the mistake of believing that their power to declare some employees exempt from the overtime and minimum wage requirements is the same as their power to choose position names for their employees. This belief (or practice) is false.
Reading the regulation carefully
The regulation states clearly that “Job titles do not determine exempt status.” The regulation lays out specific requirements for determining exempt status for executive, management, administrative and professional employees.
The employee must be compensated in salary as opposed to wage basis. The employee’s first responsibility must be supervising or managing the business or a specific department. The employee must be responsible for the work of at least two other full-time employees. Finally , the employee must possess the authority to hire and fire employees or have recommendations about particular individuals being given special weight by persons authorized to make such decisions.
An exemption for administrative work must be based on the employee’s ability to exercise discretion with regard to “matters of significance.”
Sound legal advice from a Florida attorney
If an employer attempts to create a class of exempt employees for the purpose of evading the overtime and minimum wage regulations, the Wage and Hour Division of the Labor Department may well commence an enforcement action that could result in costly penalties for the employer. Employees who believe that they have been wrongly denied overtime and minimum wage benefits can also sue the employer to recover back pay, unpaid overtime and unpaid minimum wages. An experienced labor law attorney can provide useful assistance in either case.