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Understanding the exemptions in the Fair Labor Standards Act

On Behalf of | Aug 15, 2022 | Employment Law For Employees, Employment Law For Employers

Both employers and employees in Kentucky understand that the Fair Labor Standards Act provides important rights to workers to receive the federal minimum wage and to be paid overtime for hours in excess of 40 worked in a standard week. The act also provides some important exemptions from these benefits for managerial, executive and professional employees. Understanding these exemptions and how they are applied by the U.S. Department of Labor can benefit both employers and employees.

The basic exemptions

The Wage and Hour Division of the U.S. Department of Labor has enacted extensive regulations that define both exempt and non-exempt classes of employees. Non-exempt employees are entitled to receive both the federal minimum wage and mandatory overtime pay. Exempt employees are not entitled to either right. Employers who must pay the mandatory overtime wage often attempt to escape this requirement by arbitrarily assigning classifications and job titles to low-level employees in an effort to fit them into an exempt category.

In applying these categories and titles arbitrarily, an employer may violate the express requirement in Labor Department regulations that the job titles must be bona fide, that is, whether an employee is exempt will be decided by the nature of the employee’s work, the employee’s role in making important management decisions, and whether the employee is, in fact, an executive employee.

Losing a lawsuit over misclassification

Employers who misclassify their employees often face stiff penalties if either the affected employees or the Labor Department brings a lawsuit to force proper classification and payment of wrongfully withheld wages. If an employee or group of employees prevail in such a lawsuit, they are entitled to receive unpaid mandatory overtime and attorney’s fees, both paid by the employer.

Anyone involved in a lawsuit regarding mandatory overtime or underpayment of wages faces a complex legal battle and may wish to consult an experienced labor law attorney for advice.