Do you know the rules and when FLSA exemptions do or do not apply? For example, is it possible to have to pay overtime to a salaried employee? Who bears the burden of proving the proper classification status when in doubt – the employer or employee? What if a job is posted as an exempt position – is the employee automatically exempt from overtime pay by accepting the position?

Misclassifying non-exempt employees as exempt from overtime can have disastrous financial and legal consequences, so it’s important to get it right. Here are some common FLSA exemption misconceptions and the truth behind the myth.

Common FLSA Exemption Misconceptions

• Misconception: there are only general FLSA exemptions. Reality: there are numerous specific exemptions. The white-collar exemptions alone include:
  • Executive
  • Administrative
  • Academic administrative
  • Professional
  • Teacher
  • Computer employee
  • Outside sales
  • Highly-compensated
• Misconception: there are no specific criteria that apply to FLSA exemptions. Reality: "each of the exemptions contains specific criteria that must be met for the exemption to apply. Failure to meet the specific criteria can render an employee non-exempt." John Skousen advised in a recent BLR webinar.
• Misconception: the employee has to prove that she is not exempt. Reality: it is the employer’s burden to prove that an employee should be classified as exempt rather than non-exempt. Proper recordkeeping is critical.
• Misconception: the job description, pay classification, position, job group, etc. for the employee is for an exempt position, so he must be classified as exempt. Reality: the focus will be on what the employee actually does on a day-to-day basis.
• Misconception: my employee is salaried, so she must be exempt. Reality: "non-exempt employees may be hourly, salaried, commissioned, paid by the day, paid by the job, paid a piece-rate, or paid in many other ways. The mere methodology of payment is not conclusive though on the exempt vs. non-exempt status." Skousen explained.
• Misconception: employers don’t need to audit their workforce. Reality: auditing can be an effective and useful tool at managing risk where the employer genuinely seeks to discover potential problems and intends to remedy them.

For more information on the FLSA exemptions, order the webinar recording of "Exempt or Nonexempt? Determining Employee Classification and Overtime Compensation." To register for a future webinar, visit http://catalog.blr.com/audio.

John Skousen is a partner in the Irvine, California, office of Fisher & Phillips LLP (www.laborlawyers.com). His law practice is concentrated on wage and hour law, compliance training, and employment litigation.