Since 2004 the Department of Labor (DOL) has not changed its Fair Labor Standards Act (FLSA) definition of a white-collar “exempt” management employee. Under the current FLSA definition exempt managers are not eligible for overtime pay. This definition is about to change and may require thousands of employers to reclassify which employees can still qualify as “exempt” managers and which cannot.
Under current FLSA regulations an “exempt” manager’s job must satisfy two tests
1. the “salary basis test”
2. the “duties test”
The current “salary basis test” requires an exempt manager to be paid a minimum of $455 per week.
The anticipated change may require that same employee to make at least $900 per week to satisfy the new salary basis test.
The current “duties test” requires that an exempt manager’s primary duties include direct management of other employees (hiring, firing, disciplining, training, scheduling, or supervising). The current FLSA definition allows managers to spend significant amounts of their time doing non-exempt types of work (servicing customers, stocking shelves, etc.), as long as their “primary” duties included the direct management component.
The anticipated new duties test may change that definition so that less than 50% of the exempt manager’s time can be spent on “non-management” tasks.
Achilles Group will be happy to help your company make sure you stay in compliance with these new regulations. Call Deborah at 281-469-1800.