FLSA Status

What Is FLSA Status?

An employee’s FLSA status describes whether they’re classified as exempt or non-exempt according to the Fair Labor Standards Act (FLSA).

The FLSA is a US law designed to safeguard employees against unjust pay and workplace practices. Governed by the US Department of Labor (DOL), this law has undergone several changes since its inception in 1938 to help the modern business owner remain compliant. More broadly, the FLSA establishes the following:

• Minimum wage
• Overtime pay criteria
• Recordkeeping guidelines
• Youth employment standards

The standards outlined by the FLSA apply to workers at federal, state, and local government levels, as well as the private sector.

Exempt vs. Non-exempt

An employee with a non-exempt FLSA status is entitled to receive overtime pay for hours worked after 40 hours of work in a workweek, while exempt employees are not eligible for overtime pay.

Exempt vs. non-exempt employment status depends on several factors. To determine an employee’s FLSA status, HR administrators, payroll specialists, and business owners need to consider the following as it applies to this law:

• How much the employee makes weekly or annually
• How they’re paid by the employer (salary or hourly)
• The employee’s role and occupation

Exempt Employee

An exempt employee is not entitled to receive overtime pay or both minimum wage and overtime pay. This means the provisions set by the FLSA do not apply to these roles. Typically, these are salaried employees and include the following:

• Executive-level personnel
• Administrative employees
• Professional employees (i.e., advanced knowledge workers)
• Outside sales team members
• Employees in certain computer-related fields

The regulations around exempt employees and the specific roles that may fall under this description are subject to minimum earning thresholds and other specific guidelines. The DOL offers additional insights into these positions and others that may apply to your business.

Non-exempt Employee

A non-exempt employee is subject to the minimum wage and overtime provisions under the FLSA. For covered non-exempt employees, overtime is calculated at a rate of at least one and one-half times the employee’s regular pay for each hour worked beyond the standard 40-hour workweek.

The FLSA also offers regulations specific to direct care workers (e.g., caregivers, home health aides, certified nursing assistants). Plus, businesses in some areas must adhere to additional provisions for non-exempt employees, such as a state minimum wage. Employers may consult the DOL’s Wage and Hour Division (WHD) and individual state guidelines for more detailed information on how to determine their workers’ exempt vs. non-exempt FLSA status.