Employers need to manage the risks and be proactive on managing overtime exemption classifications. In a BLR webinar titled "Advanced Exemption Audits: Evaluate Your Overtime Classifications Now To Avoid Costly Trouble Later," Mary Topliff, Esq., outlined the primary overtime exemption classifications, which include the following:
- Executive (Manager)
- Professional (Licensed/Learned/Computer/Creative)
- Outside Sales
- Fair Labor Standards Act (FLSA) Highly Compensated
There are also some miscellaneous other exemptions at the federal level, and in addition to these categories, some states have their own exemptions as well. A few of the exemptions are industry specific, such as the personal-care-attendant exemption. However, any particular industry should not expect a special exemption.
There are two components that must be met for most of these exemptions:
- The first is that the person is paid on a salary basis (though this has some exceptions, most notably that a computer professional can be paid on an hourly basis, and an outside salesperson may be paid on commission).
- The second component is that the employee’s regular duties must qualify for a specific exemption.
However, salary alone is not sufficient to meet the exemption. Some employers have the misconception that, due to their employees being paid on a salary basis they must be exempt, which is not the case. If the salary itself is not paid properly, that can result in losing the exemption as well.
Mary Topliff, Esq. founded the Law Offices of Mary L. Topliff in San Francisco in 1997, after practicing civil and employment litigation for nine years. ( www.joblaw.com) The firm specializes in employment law counseling, training, and compliance, focusing on practical solutions to avoid costly legal issues. She has advised many organizations regarding overtime exemption analyses and strategies for minimizing the risk. Topliff is a published author and frequent speaker on legal issues impacting the workplace.