FLSA (Fair Labor Standards Act) Frequently Asked Questions

The Fair Labor Standards Act (FLSA) is a federal law enacted in 1938, which defines employment standards such as minimum wage, overtime pay, record keeping, and the use of child labor. 

What is the FLSA?

The Fair Labor Standards Act of 1938 is a federal law that regulates various aspects of employment law such as minimum wages, child labor standards, and overtime pay provisions.  The overtime pay provisions of the law establish standard criteria (tests) that employers must use to determine which jobs in their organization are covered (exempt) from overtime pay provisions.  These tests concentrate on the responsibilities and duties assigned by the employer to the job.  Personal qualifications, job titles and hours worked have no bearing on whether the job can meet the test and be considered ineligible for overtime.

The United States Department of Labor (DOL) assumes that all jobs in an organization are eligible for overtime unless proven by the employer (by use of tests) to be exempt.  Failure to comply with the FLSA is punishable by substantial fines and ongoing audits by the DOL.  At the University of St. Thomas, those jobs that can pass an exemption test are classified as salaried.  Those that cannot, and are eligible for overtime pay, are classified as hourly.

What are the FLSA exemption tests and how do they work?

To qualify for exemption from the FLSA, jobs must convincingly and clearly meet one of the five (5) exemption tests listed by the DOL.  A job's specific duties and responsibilities must meet the requirements of the DOL's regulations and interpretations.  Jobs must also be paid on a salary basis at no less than $455 per week.  Job titles in no way determine exemptions status.  Furthermore, interpretations are subject to case law and DOL opinion letters.  The five tests are:

Executive Exemption
To qualify for exemption, all of the following must be met and documented:

  • Employee's primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • Employee must customarily and regularly direct the work of at least two or more fulltime employees or their equivalent;
  • Employee must have the authority to hire or fire employees, or the employee's suggestions and recommendations to the hiring, firing, advancement, promotion, or any other change of status to other employees must be given particular weight.

Administrative Exemption
To qualify for exemption, all of the following must be met and documented:

  • 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;
  • Employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption
To qualify for exemption, all of the following must be met and documented:

  • 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 and learning;
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Computer Employee Exemption
To qualify for exemption, the following tests must be met and documented:

  • Employee must be employed as a systems analyst, programmer, software engineer, or other similarly skilled worker in the computer field performing the primary duties listed in the regulations.

Outside Sales Exemption
To qualify for exemption, all of the following must be met and documented:

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

Where can I find more information on the FLSA?

The FLSA reference site at the Department of Labor is: www.dol.gov/whd/flsa

Does reclassifying a position from salaried to hourly mean a demotion?

No, not at all.  Reclassification only ensures that UST is in compliance with the law and that the employee is receiving the overtime pay rights they are entitled to.  Changing status from salaried to hourly does not diminish or change the value that is attached to a job by UST.