Employees who meet certain requirements are considered to be exempt from being paid overtime. There are three tests for employees to determine exempt status. Two of the tests, the salary basis test and salary level test, involve compensation. The third, the duties test, involves the type of work being performed.
The salary basis test and salary level test both involve the amount of compensation needed to qualify for exemption. Salary basis means that an employee must be paid a salary or a fee that meets the minimum requirements. The salary level must be at a certain amount in order for the employee to be exempt. On a fee basis, exemption starts when the fee for 40 hours of work is equal to or greater to $455.
The next test requirement involves the duties of the position. In order to determine whether or not exemption applies, it is important to not only look at the job description but what duties are actually performed. A position is considered to be exempt when it is considered to be administrative, executive, or professional, and there are specific qualifications under each position.
There are certain requirements for each type of job as well as specific professions. For example an exempt administrative position is one that’s primary duties include non-manual work and that relate to management or the operations of the employer. The position should also require discretion and independent judgment on important matters to qualify as exempt. Each state and every position may have different regulations regarding what jobs are exemptions from overtime pay.
Compensation.blr.com has many tools and resources to help make your job easier. The Salary Center lets you produce custom salary reports for hundreds of jobs by state, region, size, and type of company. Benefits data, bonus and incentive data are all available. Or, use the Performance Appraisal Wizard to rate your employees fairly with its easy to use 8 step wizard.
The compensation Library has more salaried employee resources like these:
How to calculate overtime with for employees on a salary
Overtime calculations with fixed or irregular weeks
Overtime Exemptions under FLSA