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Because we are getting closer to the FLSA changes that December brings, I have attached a PDF that you may find helpful. I encourage everyone who has not already familiarized themselves with the FLSA changes to read the attached in its entirety, though below is a summary for your quick review – the below is just an abbreviated outline/summary and therefore does not address specifics such as, for example, outside sales, educators, lawyers, and medical professionals.

Three tests:

  1. How paid – salary (sometimes fee basis) versus hourly. Salary workers can be eligible for overtime.

  2. How much paid – this alone does not determine exempt versus non-exempt status, but the new threshold is $47,476. This is a change from the old regs.

  3. Duties test – executive, administrative, or professional services (no change from the old regs). See below for more information for each category.

Managerial/Executive: Has the primary duty of managing the enterprise or a department/subdivision of the enterprise. Additionally, must regularly direct the work of at least two other full-time employees or their equivalent, and have either the influence over or the authority to: hire, fire, promote, or otherwise change other employees.

Admin: Office or non-manual work directly related to the management or general business operations. Additionally, primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.

Learned Professional: A bona fide professional must primarily perform work that either requires advanced knowledge in a field of science or learning, usually obtained through a degree, or that requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

Note: an agreement with an employee may be for a salary paid in exchange for a 45 hour work week, for example, and not a 40 hour work week. If such is the case, then overtime kicks in at the 46 hour mark. This should be thoroughly understood, agreed to, and acknowledged with both parties signatures documented on an at-will employment document.

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