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HR Tip of the Month – Review Exempt Status

While you’re digging into employee classifications for employees who will be affected by the upcoming FLSA changes, it’s a great time to also look at all employees who will remain exempt to ensure that they can be properly classified that way.

Exempt employees must not only make the minimum salary ($913 per week or $47,476 per year, effective December 1, 2016), they must also perform all of the required duties for the kind of exemption being used. Misclassification of employees who meet the minimum salary requirement but not the duties test is more common than you might think. And it can be costly.

For example, to be properly classified as an executive employee (generally used for managers), an employee must make the minimum salary and manage an organization, department, or division, and have the power to hire or fire, or make similarly important executive decisions, and manage at least two full time employees or the equivalent. It’s a tall order!

Content provided by TPC HR Support Center.