Overtime Exemption

Editor's Note: Overtime exemptions must be applied correctly.

Michael CardmanOverview: Exemptions from federal and state overtime requirements are available for a wide variety of employees, most typically executives, administrators and professionals.

These exemptions can help an employer to keep its payroll more predictable and reduce its recordkeeping burden. But an employer must be careful before claiming an exemption.

Trends: The two-headed dragon of employee lawsuits and government enforcement continues to make the correct application of overtime exemptions a key concern for HR. Many lawsuits have been collective actions, in which hundreds and sometimes even thousands of similarly situated employees sue as a group. The standard for certifying these collective actions is relatively lenient compared to other employment laws, and for many years, most courts allowed them to proceed. Recently, the pendulum appears to be swinging in the other direction, with more and more courts taking a more stringent stance on whether employees truly are similar enough to sue as a group.

Author: Michael Cardman, Legal Editor

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