Overview: The Fair Labor Standards Act (FLSA) was written in 1938, at a time when manufacturing and agriculture dominated the American economy. The law's structure for classifying employees as exempt or nonexempt from minimum wage and overtime requirements reflects that simpler time. Although it has been updated periodically in the decades since, the FLSA's classification scheme is often difficult to apply to more modern service- and information-related jobs.
One type of employee that has proven especially difficult to fit into the employee classification structure – and has also been the plaintiff in hundreds of lawsuits – is managers. Today's lean, flexible workplace often necessitates that managers pitch in and perform nonexempt work, rather than stand around with a clipboard in hand directing other employees. The more nonexempt work they do, the more likely it is they need to be paid overtime.
Complicating matters is the fact that employees' job duties change frequently. Employers often make the mistake of classifying all employees with a particular job title as exempt. When changes in the workplace necessitate changes in an employee's job duties, that classification can be jeopardized. HR is well-positioned to stay on top of these changes, and must remember that FLSA classification is an ongoing challenge, not a one-time task.
In addition, it's important that employers follow state requirements regarding employee classification.
Trends: The US Department of Labor (DOL) is expected to issue new employee classification regulations that will raise the minimum salary for most exemptions.
Author: Michael Cardman, Legal Editor
Updated to reflect the forthcoming Illinois Service Member Employment and Reemployment Rights Act.
It is not clear what information the DOL hopes to learn from the listening sessions beyond what it collected from the 214,000-plus public comments it received last year.
The Washington State Department of Labor & Industries is looking at several options for increasing the minimum salary for overtime-exempt employees, ranging from $455 per week to $1,440 per week.
Updated to reflect an extension of the public comment period for proposed rules that would affect the minimum salary and the duties tests for most overtime-exempt workers.
Updated to reflect a court decision regarding the independent contractor test under California's wage orders.
Updated to reflect amendments to the scheduling requirements under the New York City Fair Work Practices ordinances, effective July 18, 2018.
This podcast looks at a Bureau of Labor Statistics survey that suggests a decline in the number of US workers employed in alternative work arrangements. Fisher Phillips attorney Rich Meneghello called the report flawed, but said it is not good news for HR professionals.
Updated to reflect a law regarding the status of certain marketplace contractors, effective July 14, 2018.
Updated to reflect a law regarding the status of certain marketplace contractors, effective July 1, 2018.
Updated to reflect an amendment to the minimum wage exemptions, effective July 1, 2018.
HR guidance on complying with the FLSA and state employee classification requirements.