Payroll, Here Are Your Articles for Wednesday, January 23, 2019
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Who Is Excluded From the FLSA's Minimum Salary Requirements?

 

Executive, administrative and professional employees who meet the FLSA's job duties and salary basis criteria are exempt from the act's minimum wage and overtime pay provisions. Per the FLSA, these employees must be paid no less than $455 per week on a salary basis. However, the following positions can be exempt without having to fulfill this standard salary basis test:

Certain computer professionals can be paid either the minimum salary requirement of $455 per week or on an hourly basis of at least $27.63 per hour.

Business owners who are employed in a bona fide executive capacity, own a minimum of 20 percent equity interest in the company where they are employed and are actively engaged in the management of the business are exempt from the FLSA's salary basis test.

Teachers are exempt from the salary basis test if their primary duty involves teaching, tutoring, instructing or lecturing in an educational establishment. This includes:

  • Regular academic teachers.
  • Kindergarten and nursery school teachers.
  • Automobile driving instructors.
  • Teachers of gifted or disabled children.
  • Certain music instructors.
  • Home economics teachers.
  • Teachers of people in skilled and semi-skilled occupations.

Outside sales employees are exempt from the salary basis test if their primary duty revolves around either of the following:

  • Making sales.
  • Obtaining service orders or contracts.

These primary duties must be customarily and frequently performed away from the employer's place of business.

Employees who are licensed to practice — and are actually practicing — law or medicine, or any branches of these professions, are excluded from the salary basis requirement. This includes employees who hold academic degrees for the general practice of medicine and are working in a related internship or resident program.

Employees in the motion picture producing industry do not have to be compensated on a salary basis if their base rate of pay meets a specific amount, as defined by the FLSA. As of Dec. 1, 2016, the minimum base rate of pay is $1,397 per week, excluding board, lodging and other facilities. Starting on Jan. 1, 2020, and every three years after that, the base rate of pay will be adjusted.

Administrative employees in educational establishments can either be paid a salary or fee of at least $455 per week or a salary that at least equals the starting pay for other teachers in the same educational institution.

Employees working in American Samoa for a nonfederal employer are subject to a lower salary level requirement — which is 84 percent of the standard minimum salary.

All of the above-stated employees do not have to meet the standard salary basis test, which requires a weekly salary of at least $455. But they are exempt provided they satisfy all other FLSA requirements for their position.

 

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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