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How The FLSA Applies To You.    

Covered employee or independent contractor?  Salaried exempt or salaried non-exempt?  Whether the FLSA's overtime pay requirements apply to you will depend on your actual job duties performed, not on job titles or contract language.

The Fair Labor Standards Act ("FLSA") governs the overtime and wage and hour rights of Georgia employees.  The FLSA covers employees, but not independent contractors, and requires Georgia employers to pay overtime to all salaried and hourly non-exempt employees, unless they satisfy all prongs of the salaried basis test and the job duties test for the administrative, executive, professional, or other limited exemptions under the FLSA.

Am I Really An Independent Contractor?

Independent contractors do not get overtime pay, regardless of how many hours they work, because they are not "employees" covered under the FLSA.  So, if you signed a contract that says you're an independent contractor, or you get paid on invoices as a contractor, that's the end of it, right?  Not so fast.  Independent contractor status depends not upon the existence of a contract that says "independent contractor," or upon what the parties might call the relationship, but rather on the actual underlying nature of the work relationship.

The FLSA test for independent contractor status is often referred to as the "economic realities" test.  The court will consider the following factors to be significant, although no one single factor is regarded as controlling:
  1. The extent to which the worker's services are an integral part of the employer's business (examples: Does the worker play an integral role in the business by performing the primary type of work that the employer performs for his customers or clients? Does the worker perform a discrete job that is one part of the business' overall process of production? Does the worker supervise any of the company's employees?);
  2. The permanency of the relationship (example: How long has the worker worked for the same company?);
  3. The amount of the worker's investment in facilities and equipment (examples: Is the worker reimbursed for any purchases or materials, supplies, etc.? Does the worker use his or her own tools or equipment?);
  4. The nature and degree of control by the principal (examples: Who decides on what hours to be worked? Who is responsible for quality control? Does the worker work for any other company(s)? Who sets the pay rate?);
  5. The worker's opportunities for profit and loss (examples: Did the worker make any investments such as insurance or bonding? Can the worker earn a profit by performing the job more efficiently or exercising managerial skill or suffer a loss of capital investment?); and
  6. The level of skill required in performing the job and the amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent enterprise (examples: Does the worker perform routine tasks requiring little training? Does the worker advertise independently via yellow pages, business cards, etc.? Does the worker have a separate business site?)
If you are covered as an employee under the FLSA, the next question to determine eligibility for overtime under the FLSA is whether the worker falls within one of the FLSA's exemptions.

Am I Exempt?

The FLSA provides an exemption from both minimum wage and overtime pay for a limited class of employees employed as bona fide administrative, executive, professional, computer professional, or outside sales employees.  To qualify for an FLSA exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis, rather than an hourly basis, at not less than $455 per week.  Job titles, job descriptions, and contract language do not determine FLSA exempt status.  In order for an FLSA exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the FLSA regulations.

Executive Exemption

To qualify for the FLSA's executive employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
  • The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  • The employee must have the authority to hire or fire other employees, or alternatively, the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemption

To qualify for the FLSA's administrative employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
  • The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance to the business.

Professional Exemption

To qualify for the FLSA's learned professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
  • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the FLSA's creative professional employee exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
  • The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Employee Exemption

To qualify for the FLSA's computer employee exemption, the following tests must be met:

  • The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
  • The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
  • The computer employee’s primary duty must consist of:
  1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
  2. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
  4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales Exemption

To qualify for the FLSA's outside sales employee exemption, all of the following tests must be met:

  • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged in sales activity away from the employer’s place or places of business.

Highly Compensated Employees

"Highly Compensated" employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA's overtime and minimum wage provisions if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption addressed above.

Blue Collar Workers

The exemptions provided by FLSA Section 13(a)(1) apply only to “white collar” employees who meet the salary and duties tests set forth in the Part 541 regulations.  The exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy.  FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt under the Part 541 regulations no matter how highly paid they might be.

Police, Fire Fighters, Paramedics & Other First Responders

The exemptions also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

CONCLUSION

These issues are very fact-intensive and require a high degree of familiarity with the FLSA's rules and regulations.  If you think you might have been misclassified as an independent contractor, or as a salaried exempt employee, and you'd like to know your FLSA overtime rights, contact a Georgia overtime attorney HERE.

Know your rights.  Contact Georgia overtime attorney C. Andrew Head today.