WHO QUALIFIES AS AN  EXEMPT EMPLOYEE UNDER FEDERAL LAW

             There are a few exceptions that permit employers to exempt employees from minimum wage, overtime pay, and record keeping requirements. 

             The biggest exemption to overtime, minimum wage and record keeping is for white collar workers which includes professional, administrative, and executive employees.

             Employees that are totally exempt under the Fair Labor Standards Act are foreign employees and state legislative employees.  These employees are not entitled to overtime pay or subject to minimum wage or the record keeping requirements under federal law.  This does not mean other laws will not apply, it just means federal law will not apply.   Some foreign countries permit employees to be worked much more than 8 hours per day with no overtime pay, but some states such as California actually have more stringent protection of its workers.  In California overtime pay accrues after 8 hours per day and 40 hours per week, the same is not true under Federal Law.  California minimum wage laws are also substantially higher than Federal Law.  Some states offer much less protection than federal law for overtime pay and minimum wage, but California is not one of those states.

              The burden of proving the employee is exempt falls within the employer and often it is litigated and whether the employee is exempt or not is a matter for a judge or jury to determine. 

.             Under Federal Law salaried professionals, administrative and executive employees are exempt.  The issue is whether or not they are “bona fide.”  There is a three part test to determine if they are bona fide exempt employees is whether or not they meet three requirements.   If the employee meets the criteria there is no need to worry about overtime pay or minimum wage.  The pay required for exempt employees will eliminate any perceived advantage in the majority of cases and will more likely than not include overtime pay and minimum wage.  The first requirement is salary, the second duties, and the third salary level.  The employee is salaried if the employee is paid a weekly or less frequent salary and if pay is not affected by the quality or quantity of work.  Meaning the pay is the same, even if the employee works a 20 hour work week one week and a 40 hour work week the next.  Pay is not related to time put in, it must not matter how many days a week the employee works or how many hours the employee works.  The employer makes no deductions if there is no work available.  The employer is allowed to make deductions for full days missed by the employee for personal reasons, but not for partial days.  There was minimum pay of $23, 600 per year or $455 per week under the 2004 standards, but it is subject to change.  Again this under federal law and state law may differ substantially.

                  For executive employees the employee’s primary duty must be one of management of the enterprise in which the employee is employed.  The employee must customarily and regularly direct the work of two more employees or the equivalent.  The employee must have the authority to hire and fire employees or the least must have the ability to make recommendations pertaining to hiring firing and promotions and the recommendation must be given great weight. The employee must also have discretionary powers.  Activities relating to the above must make up at least 80% of the employee’s work. 

                 Administrative employees are exempt if they ear a salary of a least $455 per week; their primary duty is performance of office or non manual work directly related to the management or general business operations of the employer; and their primary duty includes the exercise of discretion and independent judgment. 

                Professional employees are exempt if the salary is at least $455 per week; the primary duty is knowledge of an advance type in a filed of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, or invention, imagination, or originally or talent in a recognized field of artistic or creative endeavor.

                Keep in mind this is under federal law and the minimum weekly pay changes over time.

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