When hiring, many employers do not give proper consideration to whether newly hired employees should be classified as \u201cexempt\u201d employees who by law are not entitled to overtime pay for hours worked in excess of 40 hours in any workweek, or \u201cnonexempt\u201d employees who are entitled to overtime pay. A failure to properly apply the legal criteria for employee classification can be a costly oversight for employers.<\/p>\n
The federal Fair Labor Standards Act (FLSA) mandates that employees be paid on an hourly basis of at least the federal minimum wage, currently $7.25. States and municipalities are free to enact higher minimum wage rates. New Jersey recently passed legislation that will progressively increase the current $8.85 per hour minimum wage to $15.00.<\/p>\n
The FLSA further mandates that employees be paid at an overtime rate of not less than 1.5 times the employee’s regular rate for each hour of work time in excess of 40 hours in any one workweek,\u00a0unless<\/em>\u00a0the employee qualifies for one of the exemptions from these overtime requirements set forth in the statute. So how does an employer determine the proper classification of an employee as either nonexempt or exempt? Unfortunately, there are no bright-line rules an employer can rely upon in making these determinations, and the employee’s job responsibilities and the employer’s control over the employee largely dictate the proper classification under the FLSA.<\/p>\n