smiling-1280975_1920To the surprise of many, the change to FLSA white collar exemption doesn’t provide for a small business exception. Regardless of the number of employees, come December 1, 2016, the rules governing overtime pay will be affecting low-paid salaried employees. However
, a few professions will not be affected by the increase in salary to meet the exemption from overtime.

Certain “White Collar” Employees Are Exempt from Exemptions

First, the FLSA rule kicks in for businesses making at least $500K a year in gross revenue. None of the FLSA rules apply to micro businesses.

In addition, the December rule will not affect a number of professions regardless of earning levels:

  • Sales personnel covered by the outside sales exemption. This exemption does not apply to sales employees in the retail sector. It applies those working outside of the employer’s place of business, i.e. a traveling salesman.
  • Employees qualifying for the teaching professional exemption. Too bad for school teachers and university professors. They will remain exempt from overtime. However, the exemption might not extend to the coaching staff in educational settings and definitely not to professional coaches. Think your kids’ league soccer coach.
  • Employees authorized to practice law and who are actually practicing law. Those are attorneys. As far as paralegals, there is an ongoing debate on their classification. However, based on the nature of the work where most paralegals complete tasks directed by attorneys, those are non-exempt and will remain so under the new rule.
  • Employees authorized to practice medicine or any of its branches who are actually engaged in the practice of medicine. These are your junior doctors, interns and medical residents.
  • IT employees with high-level skills probably meet the computer-employee exemption as long as they earn at least $27.63 per hour. Think Analyst and Developer but not the Helpdesk Technician.

The Bottom Line

If you have salaried employees who make less than $48,000 AND none of the exemptions listed apply to your organization, it’s time to look at their classification. Getting this wrong could cost you thousands of dollars in back pay and fines.

Use the Step-by-step guide to be Overtime Ready in time for December 1st.

Contact me with your questions.