Importance of Exempt Employees to Small Business Success

Hard-working employees are one of the important assets of every successful business. When it comes to small businesses, the role of such employees becomes even more crucial due to limited resources.

Employees in critical roles such as executive, administrative, and professional are important to the success of small businesses because people in those roles play crucial roles in the organization, such as running the business, framing and executing management policies, and performing white-collar tasks. that require independent judgment and discretion. .

For a small business to achieve its goals as planned, it needs employees in crucial roles who will work hard for at least the initial years of the business or through the project’s lead time. If employees in these roles are enrolled as regular employees, in accordance with the Fair Labor Standards Act (FLSA), they are entitled to minimum wage and overtime pay, which is one and one-half times the regular rate of pay. These types of laws not only prevent small businesses from discouraging long work hours, but also make it more difficult for them to achieve their business goals.

Exempt Employee Law

To avoid such cases, you can make use of the ‘Exempt Employees Act’ – under which the FLSA provides exemption from both minimum wage and overtime pay for employees performing executive, administrative, professional and sales functions bona fide outsiders. Some sections of the law also exempt certain employees with computer skills.

Eligibility for exempt employee status

The job title alone does not determine exempt status. For an employee to qualify, they must pass certain tests regarding her job profile and salary in accordance with the Department’s regulation. Although the job profile varies from job to job, a common rule is that exempt employees must be paid based on their salary and the minimum wage must not be less than $455 per week.

Only for ‘white collar’ employees

Under the FLSA, only white-collar employees who meet the job profile and salary tests are eligible for the exemption. The exemptions do not apply to blue-collar workers who perform manual labor whose work involves repetitive tasks with their hands, skill, and energy, such as those employed in the fields of production, construction, maintenance, and in occupations such as carpenters, mechanics, plumbers etc These employees are entitled only to minimum wage and overtime pay.

The Act also does not apply to employees of various public service departments such as police, fire, paramedics, and other first responders.

Benefits of having exempt employees

Exempt employees in the above functions can enjoy a more flexible work environment than non-exempt employees, who typically finish their work on their scheduled shift.

• The FLSA prohibits an employer from requiring exempt employees to “punch a clock” or work a particular schedule, or make up time lost due to absences. Therefore, whenever he requires it, the employee can stretch overtime, work on weekdays and holidays.

At the same time, the department also does not limit the work that an employer can expect or require of an employee.