Evaluating Employee Exempt Status According to Revised FLSA Exemption Criteria

Chester Hanvey and Elizabeth Arnold write about the US Department of Labor’s revised Fair Labor Standards Act (FLSA) regulations.

In March 2016, the Department of Labor submitted revised FLSA regulations to the White House for final approval. The revised regulations define which employees are “exempt” from FLSA protections such as overtime and which employees are non-exempt and thus overtime eligible. We expect that the revisions will be released in the next few months and will greatly reduce the number of employees who qualify for an exemption. Due to the pending revisions, we anticipate that many employers will choose to audit current exemption classification to minimize legal risks associated with misclassification. In this article, we discuss the anticipated FLSA revisions and describe the steps needed to determine which employees in an organization qualify as exempt. Over the years, we have developed and refined methodologies to thoroughly evaluate employee exempt status, and we provide case studies as illustrative examples.