Chapter 01
Exempt vs. Non-Exempt Employee Classifications
Misclassifying non-exempt staff as exempt is one of the most common and expensive employment law errors.
The Three-Part Exemption Test
To be exempt from overtime under federal FLSA executive, administrative, or professional exemptions, an employee must satisfy:
- Salary Basis Test: Paid a predetermined, fixed salary not subject to reduction based on work quality.
- Salary Level Test: Earn at least the federal statutory threshold.
- Duties Test: Specific job duties must involve executive management, independent discretion, or specialized professional knowledge.
Operational Pro-Tip:Job titles mean nothing to the Department of Labor. A "Project Manager" performing routine clerical data entry is legally non-exempt.
Chapter 02
Calculating Regular Rate of Pay for Overtime
Overtime is not simply 1.5x base hourly wage when non-discretionary bonuses or commissions are paid.
Including Non-Discretionary Compensation
The regular rate of pay includes all remuneration for employment, such as shift differentials and production bonuses, divided by total hours worked in the workweek.
Chapter 03
Compensable vs. Non-Compensable Breaks
Improper break deductions trigger frequent class-action wage claims.
Bona Fide Meal Periods (Unpaid)
Must typically be 30 minutes or longer and completely relieve the worker of all active and inactive duties.
Short Rest Intervals (Paid)
Breaks lasting between 5 and 20 minutes must be counted as compensable working time under federal law.
Chapter 04
Mandatory Timesheet Recordkeeping Mandates
Section 11(c) of the FLSA requires employers to keep accurate records of hours worked for all non-exempt workers.
Required Data Points
Time and day of week when workweek begins, regular hourly pay rate, daily hours worked, total weekly straight-time earnings, and total overtime pay.
