Exempt vs. Nonexempt: Navigating the FLSA Duties Test
It’s one of the most misunderstood sets of rules in all of HR compliance; and per some estimates, between 70 to 90 percent of employers get it wrong. The Fair Labor Standards Act (FLSA)’s rules governing overtime pay have challenged employers for decades, in large part due to what’s referred to as the “duties test.”
On its face, it’s a simple concept: an employee’s day-to-day responsibilities and role within the broader organization should determine his or her overtime eligibility. But the FLSA was first drafted in 1938, and even subsequent revisions in the 40s, 70s, and early 2000s have failed to clarify key parts of the rules.
The end result? The duties test is nuanced, and interpreting it has become something of an art form. This helpful guide will clarify the rules and empower you to conquer the duties test.
- How to use wages and responsibilities to classify employees.
- Different types of exemption classes and how employees fit into each.
- How classifications vary on a state by state basis.
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