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FLSA - Exempt or Non-exempt?

Whether your position is exempt or non-exempt from the Fair Labor Standards Act (or FLSA) to a large extent drives whether you are eligible to be paid time and a half for working more than 40 hours in a week, the amount of flexibility you may be allowed in your work schedule, and the length of time you can be suspended without pay when you are disciplined. Under the WSP contract and State Statutes, exempt employees earn vacation on an accelerated schedule and may use professional time in consideration for additional hours worked. (Note that professional time is not necessarily on an hour-for-hour basis.)

A Department of Workforce Development (DWD) table comparing the state and federal FLSA provisions lists the specifics of each of these tests can be found at: http://www.dwd.state.wi.us/er/labor_standards_bureau/ls_pdf_files/ot_doc_for_website.pdf

Both the state and federal rules include two tests to determine whether a position meets the specific exclusions for "Executive, Administrative, Professional and Outside Sales’: the"payment on a salary basis test" and "duties and discretion test". Both tests must be met to be considered exempt from the overtime pay and minimum wage provisions of FLSA. With the exception of some forensic scientists and some entry level positions, all of the classifications within WSP perform work that meets the "duties and discretion test" for professional employee exemption. Our work is predominantly intellectual and varied so it cannot be standardized in relation to a given period of time and it involves consistently exercising judgement and discretion.

In August 2004, the federal FLSA was changed, increasing the minimum wage requirements for most of the exemptions to $455 per week.. With this change, several half time employees that were previously considered as exempt had their FLSA status changed to non-exempt and in the process, lost approximately 8 hours of vacation in 2004 (the actual amount lost was prorated back to the August effective date). Those people affected that continue to work 20 hours per week will not earn the 20 hours of vacation time for 2005 they would have if they had remained in exempt status.

What can you do to get that vacation back? What is it worth?

Individual circumstances may moderate the effects of changing to non-exempt status.

For those people who have peak periods in their work and whose employer can pay them for extra hours worked, they may earn more than the value of the vacation with a non-exempt status.

Others can adopt an alternate work pattern to earn more than $455 in one week (exempt week) and less in the next (non-exempt week). For some, this may mean working three days in one week and two in the next or even working 22 hours in one week and 18 in the next. If the work permits, it may even be possible to work one week on and one week off. With this option, 10 hours of vacation will be earned without working any additional hours.

In some circumstances, a slight increase in salary may put your wages over $455/week. Your employer may consider this option if the budget allows and it doesn’t create other inequities.

Another alternative would be for your employer to increase the number of hours you are assigned to work. This may be done by increasing your FTE or with an LTE appointment.

FLSA Status and Discipline

FLSA limits employers’ ability to suspend exempt employees without pay or to dock paychecks for absences of less than a day. Exempt employees may not be suspended without pay for less than five days. If an employer imposes this type of suspension, then the employee FLSA status gets changed non-exempt.

More Information

If you are interested in more information on the policies surrounding FLSA status, consult bulletin OSER-0054-MRS posted on the Office of State Employee Relations (OSER) web site. http://oser.state.wi.us/bulletins/bulletin_get.asp?bid=245, the Department of Workforce Development website, or the federal Department of Labor website http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm.


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