HR policies?

Question

There are potential changes to my current position and I would like to know what specifically distinquishes a position from salary and hourly. The position is currently hourly and the new position will require more travel. At the present, I won't be supervising anyone (other than temps) but it could grow so that at least one person would be under me (distant future).

Answer 1

Exempt / Non-exempt status is defined by the Federal government and more narrowly defined by some States. Check your state DOL/DFEH for more details. A link is below with some basic information.

Travel as a requirement does not make a job exempt. You have to look at many different factors. A google search will get you some worksheets you can use as well.

In my opinion, you are better off being non-exempt as long as possible - take advantage of the overtime pay that you will be entitled to while you travel with this new position.

Answer 2

That's a really difficult question to answer. The FLSA (Federal Labor Standards Act) dicates which positions are exempt or non-exempt (salary and hourly respectively). There are 5 basic categories that can classify someone as "salary." They are administrative, executive, professional, outside sales, and computer employees. It would be way too much to list all of the requirements that have to be fulfilled for you to know what category you might fall in.

Generally, having direct reports or travel doesn't play a large part. It's about how much "creativity and decision making power" you have and subject to a minimum salary. I recommend you check out the federal requirements for more informatoin. Here's the link: http://www.dol.gov/esa/whd/flsa/.

Answer 3

EXEMPT AND NON-EXEMPT EMPLOYEES

State and federal laws regulating the pay, benefits, and other rights of workers generally apply only when there is an "employee" working for an "employer." See Memo 1680 Definition of Employer and Memo 1700 Definition of Employee.

Still, many of these laws contain exemptions. When employees qualify for an exemption, they are not covered by certain employment regulations. So, when employees are classified as "exempt," it simply means that some of the rules do not apply to them.



Example: Jack is a salaried executive in charge of a bank branch and is exempt from overtime. So, the bank need not pay Jack an overtime premium when he works excess hours. In contrast, Betty is a non-exempt teller. So, the bank must pay Betty for every hour that she works, and must pay her a premium when she works overtime.1


Exempt Employees are Employees
Even if an employee qualifies for an exemption, they are covered by many other employment laws. For example, companies may have to comply with the Americans with Disabilities Act (ADA) or the Family and Medical Leave Act (FMLA) for exempt employees.

So, do not confuse exempt employees with workers who are considered non-employees.


Example: Tony is an independent painting contractor. May hires Tony to paint an office building. Although Tony works for May, Tony is not covered by most employment laws because Tony is an independent contractor and is not considered May's employee.

Now, suppose May hires Eve to manage her office staff. If Eve meets certain requirements, she may qualify for an executive or administrative (white-collar) exemption.2 Although Eve may be exempt, she is still considered May's employee and is covered by most employment laws.


The following categories of workers are not considered employees and are not covered by most employment laws:3


independent contractors,4
lessees (independent businesses in a larger organization),5
volunteers in non-profit organizations,6
students and trainees,7
partners and joint venturers, and
members of religious orders.
Whether a worker qualifies as an employee or a non-employee is complex and is decided on a case-by-case basis. Since the definition of "employee" is very broad and may vary depending on the circumstances, almost anyone who works for a business may be considered an employee.8

Wage and Hour Exemptions
Although most employment laws exempt certain employees, the terms "exempt" and "non-exempt" traditionally refer to employees who are exempt from wage and hour regulations, especially overtime.


Note: From here on, the term "exempt employees" means employees who are exempt from wage and hour regulations.


The wage and hour regulations are based on state law and the federal Fair Labor Standards Act (FLSA), and govern various aspects of the employment relationship including:


overtime
minimum wage
recordkeeping
work schedules
maximum hours
deductions for uniforms and equipment
meals and lodging credits
meal and rest periods
show-up pay
changing rooms and facilities
seats
temperature
elevators
Note: Although most exempt employees are commonly known to be exempt from overtime, they may also be exempt from many other wage and hour requirements, such as recordkeeping rules, mandatory meal breaks, and so on.


Sometimes, an employee may be exempt under one set of regulations and non-exempt under another set.


Example: Mack is nurse working in Freida's clinic. Mack may qualify as exempt from federal overtime requirements as a professional employee. But, if he cannot qualify for this exemption under the state rules, Freida must pay Mack overtime to comply with the state regulations.

Note: When a Memo refers to an exempt employee, it generally means that the employee is exempt from all of the applicable state and federal regulations (unless the Memo states otherwise). An employee that is exempt from a state regulation but not the corresponding federal regulation, or vice versa, is usually referred to as non-exempt.


Do Not Assume Employees are Exempt
Different rules govern each of the different types of exemptions. Many employers wrongly assume that employees are exempt if they're paid a salary, or that anyone with the title "manager" is exempt. This is incorrect. It is usually impossible to determine if someone is exempt based simply on their pay or job title.

If employees meet all requirements necessary to qualify for an exemption, they are exempt employees for that workweek. So, it's possible for an employee to be exempt from overtime one week but not another.9


Example: Laura sells business equipment for a computer company. As long as she spends more than 50 percent of her workweek making sales calls, Laura may qualify for an overtime exemption. But, if Laura spends too much of her time doing routine paperwork at the office, she will not qualify as an exempt employee. See Memo 1910 Overtime Exemption for Outside Sales.

Note: If a claim is filed, government labor agencies will probably look at a period greater than a week to determine if a particular employee regularly meets all requirements. But, even a temporary failure to meet one test of an exemption may result in a loss of the employee's exempt status.


COMMON EXEMPTIONS

The following discussion briefly introduces some common exemptions.


Note: This is not a complete list of exemptions. And, some of these exemptions may not apply to all businesses. To learn about exemptions that apply to your organization, read Memo 1710 Exempt Employees for Your Company.


Exemptions with Qualifying Tests
The following exemptions require employees to meet qualifying tests.


White-collar employees
Employees may qualify for the white-collar exemption if they fit in one of the following categories and meet all of the requirements for that particular exemption:10


executive employees, which includes employees whose primary duty is managing others;11
administrative employees, whose work directly relates to management policies or general business operations;12
professional artists, which includes employees in recognized artistic fields who do original and creative work;13
professional employees, who generally have a license or advanced degree in a field of science or learning;14 and
certain professionals in computer-related fields, including programmers and systems analysts.15
Outside salespeople
Outside salespeople who sell goods or services away from a business may qualify as exempt from most wage and hour requirements. See Memo 1910 Overtime Exemption for Outside Sales.

Inside salespeople
The inside sales exemption applies to employees who make over half of their pay from commissions selling products or services. Qualifying inside salespeople are exempt from the overtime rules. See Memo 1900 Overtime Exemption for Inside Sales.

Family businesses
Businesses in which all the regular employees are in their employer's immediate family are exempt from most wage and hour requirements. See Memo 2030 When Family Members are Employees.

Learners, students, and disabled employees
Learners, apprentices, minors, students, and employees who have disabilities may each qualify for a wage and hour exemption. See Memo 3665 Special Minimum Wage for Learners, Memo 3670 Special Minimum Wage for Students & Youths, and Memo 3680 Special Minimum Wage for Disabled Employees.


Exemptions for Certain Jobs
Employees in certain occupations may be covered by exemptions that automatically apply to everyone who does that type of job, including:


certain personal attendants and baby-sitters employed by private households
taxicab drivers
rail and air carrier employees
irrigators
carnival ride operators
movie projectionists
LEGAL CONSEQUENCES

Employers cannot be penalized for simply misclassifying an employee as exempt or non-exempt. However, if employers misclassify a non-exempt employee as exempt, they may violate minimum wage, overtime, and wage payment requirements. If employers violate these laws, they may face state and federal civil and criminal penalties. See Memo 4110 Penalties for Late or Non-Payment of Wages, Memo 4125 Penalties for Failure to Pay Minimum Wage, and Memo 4135 Penalties for Failure to Pay Overtime.

ADDITIONAL POINTS


Government labor agencies presume that the exempt status is the exception and not the rule. And, the burden is on the employer (not the employee) to prove that an employee is exempt. Employers who treat employees as exempt are often penalized after these employees are later determined to be non-exempt. This may happen after the employment relationship goes bad or during an audit years after hiring an employee.
Even if employers and employees sign an agreement that the employee is exempt, the agreement is not valid. Government labor agencies determine employees' exempt status by considering each employee's duties and salary. So, even if employees' job descriptions meet all requirements on paper, the real test is what they actually do at work. And, if one employee is determined to be misclassified, all of the other similar "exempt" employees may also lose their exemption.
Since the proper determination of an employee's exempt status is so important, employers should read the Memos that relate to each applicable exemption and consult an employment lawyer to verify which employees qualify as exempt. Even if an employee does not qualify for a white-collar exemption, the employee may qualify for some other exemption.