Most American workers are legally entitled to earn at least the minimum wage for all hours worked in a workweek, as well as time-and-a-half for overtime hours (hours over 40 in a workweek). But minimum wage and overtime laws do not apply to all types of workers, as there are many exemptions to the FLSA’s coverage.
Some employers abuse these gaps in coverage by misclassifying their employees so that they do not have to pay legally mandated wages. If your employer treats you as exempt from minimum wage and/or overtime pay, you should not simply take your employer’s word for it. Rather, you should know your rights.
Although there are many different types of exempt job categories under the FLSA, below are just a few examples:
Minimum wage and overtime laws only apply to employer-employee relationships. Therefore, independent contractors are not covered by minimum wage and overtime laws. However, employers often mis-label workers as independent contractors, either accidentally or intentionally, to avoid their legal obligations. It doesn’t matter that the worker and the company each refer to the worker as an independent contractor, and the existence of a written independent contractor agreement is also not conclusive. Rather, courts look at the economic realities of the relationship, including an analysis of the following factors: (1) the permanency of the relationship; (2) the degree to which the employee/contractor has invested in facilities and equipment; (3) the nature and degree of control which the employer/purchaser exercises over the employee/contractor; (4) the employee/contractor’s opportunities for profit and loss; (5) the amount of initiative, judgment, or foresight in open market competition with others required for the success of the employee/contractor; and (6) the degree to which the employee/contractor independently organizes and operates his or her business. For a more detailed discussion of the independent contractor issue, clickhere.
Overtime laws do not cover executive employees. The law defines executive employees as those who (1) are compensated on a salary basis at a rate not less than $455 per week; (2) are tasked primarily with managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; (3) customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (4) have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. For a more detailed discussion of the executive exemption, click here.
Overtime laws do not cover professional employees. The law defines professional employees as those who: (1) are compensated on a salary basis at a rate not less than $455 per week; and (2) are tasked primarily with the performance of work requiring advanced knowledge in a field of science or learning which must be customarily acquired by a prolonged course of specialized intellectual instruction. For a more detailed discussion of the professional exemption, click here.
Overtime laws do not cover administrative employees. The law defines administrative employees as those who: (1) are compensated on a salary basis at a rate not less than $455 per week; and (2) are tasked primarily with the performance of office or non-manual work which is directly related to the management or general business operations of the employer or the employer’s customers and includes the exercise of discretion and independent judgment with respect to matters of significance. For a more detailed discussion of the administrative exemption, click here. Computer Employees
Overtime laws do not cover certain employees who work with computers. A computer employee is exempt from the FLSA’s overtime requirements if he or she meets the following requirements: (1) compensated on a salary basis at a rate not less than $455 per week (or not less than $27.63 per hour); (2) tasked primarily with (a) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications, (b) the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications, (c) the design, documentation, testing, creation or modification of computer programs related to machine operating systems, or (d) a combination of the aforementioned duties, the performance of which requires the same level of skills; and (3) employed as computer systems analysts, computer programmers, software engineers, or other similarly skilled workers in the computer field performing the duties described above. For a more detailed discussion of the computer employee exemption, click here.
Outside Sales Employees
Minimum wage and overtime laws do not cover outside sales employees. The law defines outside sales employees as those who: (1) are tasked primarily with making sales, or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and (2) are customarily and regularly engaged away from the employer’s place or places of business. Employees who sell at an employer’s facility or who sell out of their home do not meet this exemption. Rather, the typical exempt outside sales employee makes sales calls and takes sales orders at the customer’s place of business. For a more detailed discussion of the outside sales exemption, click here.
If you think that you are inaccurately being classified as exempt from minimum wage or overtime pay, or you simply want to better understand your rights, you should contact a St. Louis overtime attorney.