The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in private sector and in Federal, State, and local employment.
Under the final rule to update the FLSA regulations, a position must satisfy three criteria to qualify as exempt from overtime:
- The incumbent is paid on a salary(not hourly) basis: must receive a predetermine, fixed salary that is not subject to reduction due to the variations in quantity or quantity of work performed.
- The salary must be at least $684/week, or $35,568 annually (the minimum salary requirement or salary threshold).
- The position’s primary duties must be consistent with executive, professional, or administrative positions as defined by Department of Labor (DOL). This is commonly referred to as primary duties test.
Employees who do not meet the above criteria are considered "non-exempt" and wage and hour rules apply, which are outlined on the Bureau of Labor and Industries (BOLI) website.
Supervisors must ensure the following for non-exempt employees:
- Established hours worked;
- Meal and rest breaks are taken in accordance with Oregon law;
- Account for travel time;
- Account for remote access – tracking when employee is working from home or remotely; and
- Account for use of cell phone and/or email during non-work hours.
Supervisors must maintain accurate time records, even if no overtime worked, so that the non-exempt employee is compensated for actual hours worked and paid overtime premium for hours worked in excess of 40/week.