Employees are often eager to get the covered “overtime” pay—”time-and-a-half,” as it’s often called—while employers are eager to keep their hourly employees from working 40 hours in a week. Most salaried employees are not eligible for overtime. However, employers must do more than simply pay their employees a salary in order to avoid paying them overtime. Salaried employees must be truly exempt.
Like hourly workers, salaried employees are also entitled to a minimum wage of sorts. In 2021, the minimum yearly salary for exempt employees is $35,568 ($684 per week). Some states have higher thresholds for exempt salaried employees, but Florida follows the federal FLSA (Fair Labor Standards Act). The FLSA threshold was last increased in 2020.
Employees paid more than $107,432 in a year are exempt as “highly compensated” salaried employees. At least $684 must be paid on a salaried basis. Highly compensated employees are exempt regardless of their job duties—a concept we’ll explore below.
Executive, Administrative, and Professional Duties
Salaried employees who are paid at least $35,568 per year but less than $107,432 must satisfy the “duty test.” There are several categories of the duty test:
- Executive exemption — The employee must manage either the company or a department of the company. Additionally, the employee must have the authority to direct the work of at least two employees and have hiring/firing discretion.
- Administrative exemption — These employees must perform non-manual work that directly relates to the “general business operations” of the company. The employee must also be authorized to exercise independent judgment and discretion related to “matters of significance.”
- Professional exemption — This exemption mainly relates to work that requires advanced knowledge or instruction. The work requires discretion and judgment from the employee. It must be in science or learning. There is also a creative professional exemption wherein the employee must work in a “recognized field of artistic or creative endeavor.”
- Other duty tests have to do with specific positions. Computer employees and outside sales representatives are two such categories.
FLSA Non-Compliance is Expensive
Keeping up with the latest FLSA minimum salary requirements is expensive, but so is ignoring the law. In addition to unpaid overtime, employers who flout this rule may have to pay $1,000 per willful violation. The most significant expense for FLSA violators, however, is often the negative publicity.
Staying in compliance with the FLSA can help your company do much more than avoid penalties. Employees who know they are being fairly compensated are more likely to stay at their current job. Trembly Law Firm can help your business implement a sound legal foundation so you can grow with confidence. Get in touch with our team today to discuss your options.
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