Definition and Requirements of Non-Exempt Employees
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Non-exempt employees have a type of duties and decision-making rank that have a method of paying their wages that qualify them to all Fair Labor Standards Act (FLSA) provisions, especially being paid for the overtime they worked.
No-exempt employees mostly are required to account for all worked hours or a fraction of hours. Usually, they will have a time card to monitor the total worked hours.
In all the states, the employers must pay under the rules of the Federal rules, FLSA and it is Fair Pay revisions of August 2004, to the non-exempt-employees all overtime hours worked at a premium (time and a one half) rate of pay.
Since these revised overtime rules were signed into effect, considerable attention was directed at the correct definition of non-exempt employees.
At the time that many exempt employees were reclassified into non-exempt workers, and gained the possibility to gain over time, others, like team leaders were changed to be considered non-exempt employees and lost their overtime pay as newly regarded as exempt employees. Wage and Hour Division (WHD) (FISA)
FLSA Overtime: Covered, nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest unless overtime is worked on such days.”
Changes to Non-Exempt employment proposed during the President Obama administration, the Department of Labor (DOL) issued new rules that raised the minimum salary level from $23,660 to $47,476.
Businesses and other organizations feared that it would bring about 4 million exempt employees to become non-exempt and have the right to overtime.
Quotes from the Society for Human Resources Management (SHRM)
“A federal judge in Texas has struck down an Obama-era federal overtime rule that would have made more than 4 million currently exempt employees eligible for overtime pay.”
“U.S. District Judge Amos Mazzant granted summary judgment to more than 55 business groups that had challenged the Obama administration’s 2016 rule that more than doubled—from $23,660 to $47,476—the minimum annual salary required to qualify for the Fair Labor Standards Act’s ‘white collar’ exemptions. The same court last November blocked the overtime rule from taking effect, but had not declared it invalid.”The Non-Exempt Status Is Gained by More Than The Employment Salary and Benefits
At the year 2004, a rule was implemented, saying that not only the salary paid for doing the job that the employee was assigned to do while defining if the position of employee qualifies the employee to be paid for overtime.
The responsibilities and duties of the job are considered for the decision about whether the position is entitled to get overtime pay. Professionals, administrative employees, and employees with management titles are not eligible for over time.
According to the proposed changes of the law, people that earn less than $47,476 would be entitled to the overtime pay with no relations to the level of responsibilities they have.
Here is a legal case where the plaintiffs claimed that the 2016 rule about overtime raised the minimum wage threshold to that high level that it made the responsibilities and duties issue losing its relevance.
The court agreed:
“Congress unambiguously intended the exemption to apply to employees who perform ‘bona fide executive, administrative or professional capacity’ duties,” said Mazzant.
Advocates of the new rule claimed that the new threshold was made to protect employees from being exploited by their employers. They say that the old threshold was not updated for years and did not match the change in the cost of living.
The Proposed Overtime Rule Was a Huge Disappointment
President Obama administration’s labor department was looking for moving more people to be eligible for a 1 and 1/2 pay for overtime work. The new salary level could have been a huge step backward for the workers in the modern work environment that is not like the industrial or manufacturer product line.
Converting millions of employees to non-exempt-employees that are paid one and half time for the overtime will raise the costs of the employers and push them to hire more employees that will do the work of the overtime and eliminate the extra pay.
The significant change that could be influenced by the new law would be a blow to the egalitarian culture that many companies adopted in recent years.
Employees would have been changed from exempt to non-exempt by the new rule. After years of working with no punch cards, they would be working overtime and paid hourly and not weekly, bi-weekly or monthly.
These changes would have made a substantial impact on the work environment. The accomplishment goals are different under hourly work; the morale will be affected negatively by the transition to the hourly worker; self-esteem will be dropped down although the pay may be higher.
A group of non-exempt employees will be paid the overtime hours they worked. A supervisor that will have to be an exempt employee. Although he stays the same over time with his team, he will not be paid his or her overtime hours. This way the supervisor will have a good reason to make as less as overtime as possible. Naturally, the supervisor will be paid a higher salary than non-exempt employees.
The judgment of the US District Judge Amos Mazzant dodged a considerable bullet from the US employees. It would have severely affected the culture of workplaces country-wide. For the moment, it allowed some breathing room waiting for the future discussion on the salary threshold.