Exempt or Nonexempt?
Exempt Classification Criteria
Even though the employee Jane Swift is increasingly becoming more frustrated with her job as a shift leader and associated pay, Amy Kostner was prompt at informing Jane she is an exempt employee and that Jones Department Store is not required to offer overtime pay for exempt employees. Amy Kostner classified the shift leaders as exempt because they are considered to be part of Jones Department Store management team. The Fair Labor Standards Act of 1938 (FLSA) proposes criteria for the basic minimum wage, overtime pay, recordkeeping, and child labor standards in private and public employment for full-time and part-time employees under FSLA’s coverage (U.S. Department of Labor, 2014). FSLA’s minimum wage and overtime pay provisions do not cover workers who fall under the following six job categories: (1) executive, (2) administrative, (3) learned professional, (4) creative professional, (5) computer, and (6) outside sales (Martocchio, 2013). Shift leaders are classified as exempt employees because they perform a wide array of managerial tasks in addition to general associate job activities. The tasks required of shift leaders fall under one or two job categories under the FLSA such as executive (i.e., management) and administrative (i.e., performing or non-manual labor directly associated to the management or overall business operations of the organization) further validating Amy Kostner’s correct classification of the shift leaders as exempt employees
The strongest advantage of Jones Department Store to having shift leaders classified as exempt is that as an employer under specific FSLA exemptions Jones Department Store is not required to pay some of their employees overtime pay. Jones Department Store is wise to carefully review their job classifications in order to avoid costly legal proceedings given the many lawsuits for unpaid overtime involving exempt employees (Shye & Kleiner, 2005).