Non-Exempt vs. Exempt: Are You Breaking The Employment Law
Can you dock the pay of an exempt employee
if he/she had to miss a couple of hours’ worth of work? According to
the Fair Labor Standards Act (FLSA), it is illegal to do so.
Exempt vs. Non-Exempt: Are You Making The All-Too Common Mistake
If an employee is deemed non-exempt and they work more than 40 hours in a work week, they are to be paid time and half for those extra hours after 40. If they are exempt, they cannot qualify for overtime but can be subjected to other rules such as no docking pay.
So, regardless of how annoyed you are by your employee taking off a couple of hours early, you cannot dock their pay. So, if your employee only comes to work for 15 minutes each day, you have to pay for that whole day. When it comes to dealing with remote workers, the same rule applies.
You can do everything from discipline, demote, fire, yell or take away vacation time; but, you are not allowed to dock their pay. What happens if you do dock a person’s pay? Simple actually! They’ve just become a non-exempt person so you’ll have to pay overtime to them starting from when they first started working for you. The attempt to save yourself some cash just ended up cost you a whole lot more in back overtime pay.
Many employers make this type of violation all the time. Mislabeling of workers is also common – exempt vs. non-exempt. It’s not easy to figure out what category a person should fall under, and if you’re unclear of the rules, it’s best to label a person non-exempt and pay them by the hour.
Why The Problem With Understanding Exempt vs. Non-Exempt
The reason for the difficulty is the FLSA’s inadequate update of today’s workforce. There are rules, however, when determining someone’s exempt status. If you have more specific questions, be sure to look over the FLSA website or call them.
3 Key Qualifications To Be Considered Exempt
If a person is to be considered an exempt employee, they’ll have to meet a few qualifications:
1 – They make a minimum of $23,600 a year
2 – Have the same type of paycheck every week (commissions and bonuses, not included)
3 – Carry out the duties of an exempt position.
What does number three mean? If a person does any of the following, they can be considered an exempt employee:
1 – Manager
If someone supervisors at least two employees and this is their main job duty – along with the hiring and firing of people, they are considered exempt. Just being dubbed manager does not give them the exempt status; they must carry out the duties of a manager. If a shift manager is responsible for helping customers, stocking shelves, running the cash register, keeping the store looking nice and ensuring employees get their breaks, they should be considered non-exempt and paid overtime.
2 – Professional
Some professionals are easy to categorize – doctors, nurses, accountants, lawyers, etc. Most folks who make in excess of $100,000 a year can be considered exempt. Any person who has significant professional discretion will also be deemed exempt. The majority of creative workers are also viewed as exempt employees.
3 – Administrative Professionals
These folks are ones who make a huge impact on the business, work of their own accord and make their own decisions. A person who answers the phones, organizes the schedule and orders your office supplies will not fall under this classification. People who work in HR, finance, IT, quality assurance and other similar positions do fall under the category. Of course, there are some exceptions so be sure to get some advice if you’re unclear in the matter.
4 – Outside Sales
These folks make sales by calling customers. If they sit inside the office, making the phone calls, they are deemed non-exempt.
For the most part, every other position is paid by the hour. So, if your accounts payable clerk works from home, she’ll need to write down her time and you’ll have to pay her for it… even if you did not authorize the overtime. If you don’t like paying for it, you’ll still have to but you can always fire them afterwards.
Exempt vs. Non-Exempt: Are You Making The All-Too Common Mistake
If an employee is deemed non-exempt and they work more than 40 hours in a work week, they are to be paid time and half for those extra hours after 40. If they are exempt, they cannot qualify for overtime but can be subjected to other rules such as no docking pay.
So, regardless of how annoyed you are by your employee taking off a couple of hours early, you cannot dock their pay. So, if your employee only comes to work for 15 minutes each day, you have to pay for that whole day. When it comes to dealing with remote workers, the same rule applies.
You can do everything from discipline, demote, fire, yell or take away vacation time; but, you are not allowed to dock their pay. What happens if you do dock a person’s pay? Simple actually! They’ve just become a non-exempt person so you’ll have to pay overtime to them starting from when they first started working for you. The attempt to save yourself some cash just ended up cost you a whole lot more in back overtime pay.
Many employers make this type of violation all the time. Mislabeling of workers is also common – exempt vs. non-exempt. It’s not easy to figure out what category a person should fall under, and if you’re unclear of the rules, it’s best to label a person non-exempt and pay them by the hour.
Why The Problem With Understanding Exempt vs. Non-Exempt
The reason for the difficulty is the FLSA’s inadequate update of today’s workforce. There are rules, however, when determining someone’s exempt status. If you have more specific questions, be sure to look over the FLSA website or call them.
3 Key Qualifications To Be Considered Exempt
If a person is to be considered an exempt employee, they’ll have to meet a few qualifications:
1 – They make a minimum of $23,600 a year
2 – Have the same type of paycheck every week (commissions and bonuses, not included)
3 – Carry out the duties of an exempt position.
What does number three mean? If a person does any of the following, they can be considered an exempt employee:
1 – Manager
If someone supervisors at least two employees and this is their main job duty – along with the hiring and firing of people, they are considered exempt. Just being dubbed manager does not give them the exempt status; they must carry out the duties of a manager. If a shift manager is responsible for helping customers, stocking shelves, running the cash register, keeping the store looking nice and ensuring employees get their breaks, they should be considered non-exempt and paid overtime.
2 – Professional
Some professionals are easy to categorize – doctors, nurses, accountants, lawyers, etc. Most folks who make in excess of $100,000 a year can be considered exempt. Any person who has significant professional discretion will also be deemed exempt. The majority of creative workers are also viewed as exempt employees.
3 – Administrative Professionals
These folks are ones who make a huge impact on the business, work of their own accord and make their own decisions. A person who answers the phones, organizes the schedule and orders your office supplies will not fall under this classification. People who work in HR, finance, IT, quality assurance and other similar positions do fall under the category. Of course, there are some exceptions so be sure to get some advice if you’re unclear in the matter.
4 – Outside Sales
These folks make sales by calling customers. If they sit inside the office, making the phone calls, they are deemed non-exempt.
For the most part, every other position is paid by the hour. So, if your accounts payable clerk works from home, she’ll need to write down her time and you’ll have to pay her for it… even if you did not authorize the overtime. If you don’t like paying for it, you’ll still have to but you can always fire them afterwards.