As an HR person, I’ve learned to differentiate between exempt and nonexempt employees and jobs, but many people don’t really understand the difference. The Department of Labor was set to increase the salary threshold for exempt work, but that’s back on hold and may or may not happen.
What’s it matter how employees are classified, anyway?
There are specific parameters around whether an employee is considered exempt (typically salaried) or nonexempt (typically hourly) from overtime. Some employers think it doesn’t really matter and either like the predictability of having salaried employees or, conversely, like the flexibility of hourly employees where wages can ebb and flow. But it’s important that we pay based on job responsibilities and expectations.
According to the Department of Labor, there are overtime exemptions for executive, administrative, professional, computer and outside sales employees as well as a salary basis requirement. Recent news has addressed the salary level, potentially raising it to $58k/year; but that’s now at the very least on hold. For the other exemptions (and some additional parameters), each has their own particular qualifications. This is a link to a fact sheet from the DOL: https://www.dol.gov/agencies/whd/fact-sheets/17a-overtime
For those who believe a job title alone is enough to convey classification, that’s incorrect. I’ve seen some very inventive job titles, but classifications really relate to the type of work actually performed by the employee. While some employees may encourage managers to go outside the parameters based on the type of pay they’d like, for everyone’s sake, companies should follow the DOL’s requirements.
Correctly classifying your employees is not only the right thing to do, it’s enforceable by the DOL. Making the wrong decisions can be costly to you and frustrating to your employees.
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