Q: You pay your secretary a salary. Is she exempt under the FLSA (ie. you do not have to pay your secretary overtime if she works over 40 hours in a particular workweek)?
A: All salaried employees
are NOT exempt. For most
businesses, salaried
employees are only exempt if they (1) satisfy the applicable “duties
test” of a “white collar exemption” (exemptions for executive, administrative,
professional, and computer professionals) and (2) are paid a minimum
of $455/week or $23,600/year salary. If
the salaried employee’s job fails to satisfy all of the duties requirements of
the white collar exemption, the employee will not be exempt and will be
entitled to overtime for all hours worked in excess of 40 in a work week. To
qualify for the administrative exemption, the employee’s primary
duty must be the performance of office or nonmanual work directly related to
the management or general business operations of the employer or the employer’s
customers and the employee’s primary duty must include the exercise of
discretion and independent judgment with respect to matters of significance.
Most secretaries do not meet the administrative exemption’s duties test and are
nonexempt.
Highly
compensated employees performing office or non-manual work and paid a total
annual compensation of $100,000 or more (which must include at least $455 per
week paid on a salary or fee basis) are exempt under the FLSA if they
customarily and regularly perform at least one of the duties of an exempt
executive, administrative or professional employee identified in the standard
tests for exemption.
These minimum salary thresholds will change as of January 1, 2020! Click here for more.
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