Are Your Employees Exempt or Nonexempt?

Exempt status is not determined by job title alone. An employee may have the title of supervisor or assistant manager, but that doesn’t automatically make him or her exempt. To qualify for an exemption, the employee still needs to actually perform specific job duties. Having an understanding of employee job duties is even more important now with the pending changes to the overtime exemption rules.

Bob, shift supervisor

As an example, let’s take a look at Bob, a shift supervisor. Bob has been a production worker on the factory floor for 15 years. The HR manager and factory floor manager decide to promote Bob to the newly-created role of shift supervisor to keep a closer eye on the day-to-day operations. They also hope that Bob’s excellent work ethic and attitude will help him lead by example. Along with his promotion, Bob is given a raise and is paid a weekly salary instead of an hourly wage.

Does Bob’s promotion qualify him for an exemption?

Not necessarily. While the job description may list Bob as a supervisor, a closer look at the actual work performed is needed. Consider questions such as:

  • What are the primary duties for the position?
  • What are the secondary (or nonessential) duties?
  • Is Bob’s primary duty management of a department or area?
  • Does Bob conduct performance reviews for his direct reports?
  • Does he have the authority to hire or fire or discipline workers?
  • Or does Bob mainly lead by example, help with production, and report problems up the chain of command?

Why review exempt classifications now?

Asking these types of questions can help make a decision on whether Bob can be considered exempt or nonexempt. But, why review exempt classifications now? On December 1, 2016, changes will go into effect for the white collar exemptions from overtime. Primarily, the rule is affecting the minimum required salary, which will more than double to $913 per week. Beyond making a determination on whether or not employees meet the new salary requirement, now would be a good time to review the duties performed by employees currently classified as exempt. With that information in hand, well-defined job descriptions that accurately illustrate job duties can help employers assess whether employees qualify for an exemption.  

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