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6 - It's a New Year and Time to Revisit the Exempt/Nonexempt Question

from NPMA

From Jan. 6: One of the fundamental payroll questions employers face is whether an employee is “exempt” or “nonexempt.” Nonexempt employees must (1) keep a daily time record, (2) receive at least the minimum wage for each hour worked, and (3) receive overtime compensation for all hours worked in excess of 40 per week. Exempt employees don’t have to do those things. We pay exempt employees a salary and they work whatever hours are necessary to get the job done.

It would be wonderful if we could classify all employees as exempt, as this would eliminate many payroll issues and make compensation planning and budgeting much simpler. However, the Department of Labor will not allow us to classify employees in this way. To the contrary, the position of the Department of Labor is that all employees are nonexempt, unless management can prove they are exempt. To be classified as exempt an employee must meet the exemption tests that are enforced by the Department of Labor. There are five exemption categories with specific tests under each category. Click here to read a summary of each.

This material was produced for NPMA members by Seay Management Consultants. Effective Jan. 1, 2015, any NPMA member is entitled to contact Seay Management Consultants to speak with one of their HR consultants free of charge regarding any employment issue that arises in your business. Click here for more details. more

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