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FLSA Exempt and Non-Exempt Employees

Questions

For more information about FLSA read the Frequently Asked Questions.

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The federal law known as the Fair Labor Standards Act (FLSA) establishes the federal minimum wage, time-keeping requirements for employee work time, and eligibility for overtime pay for certain types of employees. Under the FLSA, employees are divided into two groups: exempt employees and non-exempt employees.  Exempt employees are exempt from the time-keeping rules and are not eligible for overtime pay under the FLSA. Non-exempt employees are entitled to overtime pay and are subject to the time-keeping rules of the FLSA. The FLSA is enforced by the U.S. Department of Labor.

Care has been taken to appropriately classify your position. If you believe that your position has been misclassified as either exempt or non-exempt, please contact flsa@miamioh.edu .

Exempt Employees (Not Overtime Eligible)

In order to be exempt from the daily time-keeping and overtime pay provisions of the FLSA, the position must meet all of the following tests:

  1. Salary Basis Test. The employee must be paid on a salary, not hourly, basis and not be subject to any reduction in pay based on quality or quantity of work.
  2. Primary Job Duty Test. The employee’s primary job duty must involve the kind of work associated with exempt executive, administrative, professional, computer or outside sales. “Primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.
  3. Salary Level Test. The employee must be paid a salary of at least $913/week ($47,476 per year), with some exceptions. Note: Teachers, lawyers and physicians are not subject to the salary level test.

Examples of Exempt Employees:

Faculty

Faculty are exempt employees because their primary duty is teaching, tutoring, instructing, or lecturing. Teachers include professors, instructors, and teachers of skilled and semi-skilled trades and occupations. Teachers are not subject to the salary level requirement.

Graduate and Undergraduate Students

Graduate and undergraduate students who are engaged in research under a faculty member’s supervision in the course of obtaining a degree are in an educational relationship, and not an employment relationship, with the University. As such, graduate and undergraduate research assistants are not entitled to overtime pay. Graduate students whose primary duty is teaching or serving as a teaching assistant also fall under the FLSA’s teaching exemption.

Resident Assistants

Students who are enrolled in an educational program and who serve as resident advisors are not considered to be in an employment relationship with the institution and thus are not eligible for overtime.

Coaches

Athletic coaches and assistant coaches may fall under the exemption if their primary duty is teaching, which may include instructing athletes in how to perform their sport. If, however, their duties primarily include recruiting athletes or doing manual labor, they are not considered teachers. A coach could primarily be responsible for instructing athletes but also spend some time recruiting or doing manual labor and still be considered ineligible for overtime.

Salaried Employees

Also known as the “white-collar” exemptions, this group includes unclassified staff who meet the executive, administrative, professional, computing or outside sales duties tests (see below) and are paid more than $913/week ($47,476/year).

Exemption Details per Role:

Executive

To qualify for the executive exemption, all of the following tests must be met:

  • The employee must be compensated on a salary basis at a rate not less than $913 per week ($47,476 per year);
  • The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent;
  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring; and firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative

To qualify for the administrative employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week ($47,476);
  • The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional

There are several different kinds of exempt “professional” employees. These include “learned professionals” and “creative professionals.” Learned professionals must primarily perform work that requires advanced knowledge in a field of science or learning.

To qualify for the learned professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week ($47,476 per year); 
  • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week ($47,476 per year); and
  • The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Employee

To qualify for the computer employee exemption, the following tests must be met:

  • The employee must be compensated either on a salary or fee basis at a rate not less than $913 per week ($47,476 per year);
  • The employee must be employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field whose primary duty consists of one or more of the following:
    • The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional specifications;
    • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
    • The design, documentation, testing, creation or modification of computer programs related to machine operating systems;
    • A combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales

To qualify for the outside sales employee exemption, all of the following tests must be met:

  • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged away from the employer’s place or places of business.

Non-Exempt Employees (Overtime Eligible)

Non-exempt employees are those employees whose primary duties do not meet the exempt duties test, who are paid hourly, and/or do not meet the salary level test.

Examples of Non-Exempt Employees:

Postdoctoral Researchers

The guidelines for postdoctoral researchers depend on whether they fall under the sciences or humanities field.

Sciences

Postdoctoral researchers in the sciences are not covered by the teaching exemption. These employees are generally considered professional employees and are subject to the salary threshold ($47,476 per year) for exemption from overtime. The U.S. Department of Labor is working closely with NIH and NSF regarding their mutual interest in this area.

Humanities

Many postdoctoral researchers in the humanities also teach. To the extent that they have a primary duty of teaching, they will be subject to the teaching exemption and are not entitled to overtime compensation. If they do not teach, however, and earn less than the salary level test, they will be eligible for overtime.

Salaried Employees

Unclassified staff, paid on a salary basis who meet the executive, administrative, professional, computer or outside sales duties test but are paid less than $913/week ($47,476 per year) will be eligible for overtime.

Hourly Employees

Unclassified and classified staff paid on an hourly basis are not exempt from FLSA provisions and earn overtime if they work more than 40 hours a week.