Under the federal Fair Labor Standards Act, or FLSA (F-L-S-A), companies are required to classify each of their workers as either exempt or non-exempt. Non-exempt workers are employees who are entitled to the benefits and protections of the FLSA. They must be paid at least minimum wage for all hours worked and given overtime pay for all hours worked over 40 per week. Employees who are paid by hourly wage are automatically considered to be non-exempt. Exempt workers, on the other hand, are employees not entitled to the benefits and protections of the FLSA and thus excluded from minimum wage and overtime provisions. Generally, employers must pay employees a salary in order to give them an exempt status. Not all employees who earn salaries, however, can be treated as exempt. Exempt status under the FLSA also depends on an employee's actual job duties. Only employees in executive, administrative, professional, or outside salesperson positions can be considered exempt. The FLSA offers two independent tests, the Long Test and the Short Test, which can be used to determine if a position meets the executive, administrative, or professional exemptions. If the duties of the position meet the requirements of either test, the employee can be considered exempt. Once employers have determined the exempt and non-exempt status of each employee, they must comply with the FLSA guidelines involving the minimum wage, overtime compensation, child labor, and equal pay requirements.
