Pay for Exempt Employees who Perform Nonexempt Duties

Under the Fair Labor Standards Act (FLSA), employees are categorized as either exempt or nonexempt for purposes of federal minimum wage and overtime laws. An employee may be exempt from the (FLSA) minimum wage and overtime requirements if the employee meets the executive, administrative, or professional duties test in addition to meeting the salary basis test.

Sometimes, exempt employees are asked to perform nonexempt duties in addition to their typical responsibilities. Because employees can only hold one status, either exempt or nonexempt, how should an employer pay this employee?

The answer depends on the primary duties of that employee. The term “primary duty” means the principal, main, major, or most important duty that the employee performs. Factors to consider when determining the primary duty of an employee include the relative importance of the exempt duties as compared with other types of duties, the amount of time spent performing exempt work and the employee’s relative freedom from direct supervision. An employer’s analysis should focus on the character of the employee’s job as a whole. Of course, if the majority of time spent in exempt duties is greater than 51 percent, that is strong evidence the position is exempt.

If the primary duty of the employee is the performance of their exempt work, an employer is not required to pay additional compensation for the nonexempt work. Of course, an employer may choose to provide additional compensation to exempt employees who perform extra work. If, on the other hand, the additional nonexempt responsibilities have now become primary, the employee should be re-classified as nonexempt and paid accordingly. If you have questions, contact the Employment Law Services group at Employers Council.