Call of Duties Test: The Most Important Factor for Exempt Status

To avoid paying overtime, we have seen a few strategies over the years. The most popular technique is just paying an hourly employee a salary–voila! Doesn’t that make the position exempt from OT? (No) Another trick is a fancy title AND paying a salary–right? (Wrong). The only way to make a position exempt from overtime is to comply with the DUTIES TEST under the Fair Labor Standards Act (FLSA). Anything less and the position is hourly and eligible for overtime.

Don’t be lulled by the notion that paying a high salary equals an exempt position. Even highly compensated employees–$107,432 annually–must  “customarily and regularly perform at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee.” You cannot get around the duties tests.

We get a lot of questions on this topic, which is not a surprise given how postions evolve and change over time. It is a good idea to take a look at your workforce to determine if you are complying with wage and hour laws. The penalties for failure to pay overtime are steep, at the state and federal level. We have a fixed fee solution (of course!) to help you. Check out our Exempt v Non-Exempt Classification Service, where we do the heavy lifting. We review your job descriptions, chat with you about our findings, and help you properly classify your positions. You can keep humming along, knowing your workforce is being paid in accordance with state and federal law.

Questions? We can help. Contact us.