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April Mabry Ronda Bauman TASB HR Services. Exempt or Nonexempt? That is the Question. Myth or Reality?. All salaried employees are exempt. Myth Employees who earn more than $23,660 per year are exempt. Myth. Myth or Reality?.

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april mabry ronda bauman tasb hr services

April MabryRonda BaumanTASB HR Services

Exempt or Nonexempt?

That is the Question

myth or reality
Myth or Reality?
  • All salaried employees are exempt.

Myth

  • Employees who earn more than $23,660 per year are exempt.

Myth

myth or reality3
Myth or Reality?
  • Employees who direct the work of two or more employees are exempt.

Maybe

  • Employees who hold more than one job in a school district can be both exempt and nonexempt at the same time.

Myth

myth or reality4
Myth or Reality?
  • Superintendent’s secretaries are exempt because of the importance of their work.

Myth

  • School districts don’t have to worry about the Fair Labor Standards Act.

Myth

myth or reality5
Myth or Reality?
  • The computer employees who know so much and solve all of our computer problems are exempt.

Myth

determining exemption status
Determining Exemption Status

The U.S. Department of Labor (DOL) assumes jobs are nonexempt.

Employers are responsible for proving the exemption claimed is valid.

PROVE IT!

exemption tests
Exemption Tests
  • Executive Test
  • Administrative Test
  • Professional Test
  • Computer Employee Test
  • Highly Compensated Employee Test

To be classified as EXEMPT, a position must meet all of the criteria for one of the exemption tests.

TAKE NOTE!

exemption status depends on
Exemption Status Depends On…
  • Salary Level
    • Minimum of $455 per week.
  • Primary Duty
  • Basis of Pay
    • Must receive the full salary for any workweek in which the employee performs any work.

Ensure the workweek is consistently defined and documented.

TAKE NOTE!

allowable deductions from pay
Allowable Deductions from Pay
  • Full day
    • Personal reasons
    • Sickness or disability
    • Offset for jury duty, witness fees, military pay
    • Unpaid disciplinary suspensions
    • First or last week of employment
    • Unpaid FMLA leave
  • Partial day
    • Permission for leave NOT requested
    • Permission for leave requested and denied
    • Exhaustion of accrued leave
    • Unpaid FMLA leave
executive exemption test
Executive Exemption Test
  • Primary duty is management of the enterprise or a recognized subdivision of the enterprise.
  • Directs the work of two or more full-time equivalent employees (FTE).

The principal, main, major, or most important duty the employee performs.[29 C.F.R. §541.700(a)(b)]

PRIMARY DUTY IS…

executive exemption test11
Executive Exemption Test
  • Primary duty is management of the enterprise or a recognized subdivision of the enterprise.
  • Directs the work of two or more full-time equivalent employees (FTE).
  • Has authority to hire or fire employees or whose recommendation to do so holds weight.
administrative exemption test
Administrative Exemption Test
  • Primary duty is the performance of nonmanual work directly related to the management or general business operation of the employer or employer’s customers.
  • Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
administrator in an educational establishment
Administrator in an Educational Establishment
  • Compensated at $445 per week OR at least equal to the entrance salary for teachers.
  • Primarily responsible for performing administrative functions directly related to academic instruction or training in an educational establishment or department or subdivision.
professional exemption test
Professional Exemption Test
  • Primary duty is the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.

Predominantly intellectual in character requiring consistent exercise of discretion and judgment.

KNOWLEDGE OF AN ADVANCED TYPE

computer employee test
Computer Employee Test
  • Compensated at $455 per week OR $27.63 per hour.
  • Primary duty consists of one or more of the following:
    • The application of systems analysis techniques and procedures to determine hardware, software, or system functional specifications.
    • Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs related to user, system design specifications, or machine operating systems.
highly compensated employee test
Highly Compensated Employee Test
  • Compensation of at least $100,000 per year.
  • Employee regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee.
nonexempt employees
Nonexempt Employees
  • An employee is considered nonexempt if the job duties do not satisfy one of the exemption tests.

When in doubt, classify as nonexempt.

TAKE NOTE!

what red flags do you see
What “red flags” do you see?
  • Page 12
  • Titles that are usually nonexempt
  • Low salaries for exempt positions
activity classifying positions
Activity ̶ Classifying Positions
  • Exempt or nonexempt?
    • What are the primary duties of the job?
      • Place orders
      • Track inventory
      • Schedule bidding
    • What are the daily tasks?
      • Place orders
      • Answer phones, e-mails
      • Follow policy
resources
Resources

April Mabry

Ronda Bauman

TASB HR Services

800-580-7782

hrservices.tasb.org