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PHR · Question #146

Henry is the HR Professional for his organization and he's discussing the status of Amy's employment. Amy earns $87,500 per year and receives a paycheck via direct deposit every two weeks. Amy was…

The correct answer is A. Amy is exempt because she is paid on a salary basis. An employee paid on a salary basis above the FLSA minimum salary level threshold meets the foundational criteria for exempt status, regardless of actual hours worked.

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Question

Henry is the HR Professional for his organization and he's discussing the status of Amy's employment. Amy earns $87,500 per year and receives a paycheck via direct deposit every two weeks. Amy was hired under the offer of a salary position, but she feels that she is working far more than the agreed 40 hours per week. Based on these scenarios, do you believe Amy is exempt or non-exempt?

Options

  • AAmy is exempt because she is paid on a salary basis.
  • BAmy is not exempt because she is working more than ten percent of her total agreed hours per
  • CAmy is exempt because she earns more than $1,000 per week.
  • DAmy is not exempt because she is offered bonuses as part of her pay.

How the community answered

(57 responses)
  • A
    72% (41)
  • B
    16% (9)
  • C
    9% (5)
  • D
    4% (2)

Why each option

An employee paid on a salary basis above the FLSA minimum salary level threshold meets the foundational criteria for exempt status, regardless of actual hours worked.

AAmy is exempt because she is paid on a salary basis.Correct

Amy is paid on a salary basis at $87,500 per year, which far exceeds the FLSA salary level threshold, satisfying two of the three tests for white-collar exemption. Assuming her job duties qualify under the executive, administrative, or professional category, she is properly classified as exempt and is not entitled to overtime pay regardless of how many hours she works.

BAmy is not exempt because she is working more than ten percent of her total agreed hours per

The FLSA does not measure exemption by a percentage of hours worked above an agreed number - exemption is determined by the salary basis test, the salary level test, and the job duties test.

CAmy is exempt because she earns more than $1,000 per week.

The FLSA salary level threshold is set by DOL regulation at a specific published dollar amount, and 'earning more than $1,000 per week' is not the correct legal standard stated in the statute or regulations.

DAmy is not exempt because she is offered bonuses as part of her pay.

Receipt of bonuses does not disqualify an employee from exempt status - the FLSA permits certain nondiscretionary bonuses and commissions to count toward the salary level requirement without breaking the salary basis test.

Concept tested: FLSA white-collar exemption salary basis and level tests

Source: https://www.dol.gov/agencies/whd/fact-sheets/17a-overtime

Topics

#exempt status#FLSA salary basis#overtime exemption#compensation classification

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