Do it Yourself HR Audit- Top 4 HR Compliance Issues Revisited.

Today, let's talk: Harassment and Discriminationand the Fair Labor Standards Act – Exempt and Non-Exempt Classifications.

Harassment and discriminationcan be extremely damaging to a company’s operations and success.  Every company has the responsibility to ensure that their workplace is free from unlawful harassment and discrimination.  You must, at a minimum:

  • Exercise reasonable care to prevent and promptly correct any harassment or unlawful discriminatory behavior.  In today’s work environment harassment and discrimination is just flat out unacceptable and any sound company has zero tolerance for violators. 
  • Have clear and effective policies that are legally compliant for each state that employees work in. 
  • Provide annual training for employees and managers.  A good training program will be interactive and include a clear statement against harassment, protect employee’s rights and foster respect, define multiple avenues for employees to raise questions or file complaints and promote overall compliance and prevention by clearly defining responsibilities.

The Fair Labor Standards Act (FLSA)guidelines for exempt and non-exempt employees are very important to comply with because unlike other statutes, FLSA violations are often not just concentrated on single employees but, are looked at from a class action standpoint.  Furthermore, Department of Labor investigations can go back as far as five years

FLSA regulations provide minimum standards for both wages and overtime entitlements and delineate administrative procedures by which covered worker time must be compensated.  Under the statute "any employee employed in a bona fide executive, administrative or professional capacity shall be exempt from the minimum wage and overtime requirements.”

  • Exempt employeesmust perform certain types of work, and they must generally be paid on a salary basis and receive a minimum salary.
    • To be exempt, employees must:
      • Generally be paid a predetermined amount each pay period. The amount paid may not be reduced because of a variation in the quality or quantity of the work performed.
    • The FLSA exempts broad categories of "white-collar" jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities and are paid a certain minimum salary. These categories include:
      • Executives
      • Administrative employees
      • Professional employees
      • Outside and certain retail sales personnel
      • Highly compensated individuals. 
  • Nonexempt employeesare those who are covered by the FLSA minimum wage and overtime pay provisions.
    • An employee who is paid on an hourly basis is usually considered to be nonexempt, regardless of the hourly rate paid.  
    • Employees are also nonexempt if they do not qualify for one of several "white-collar" exemptions.  
    • Employees generally classified as nonexempt include, but are not limited to:
      • Clerical
      • Blue-collar
      • Maintenance
      • Construction and semiskilled workers
      • Technicians and laborers

Bottom Line:  Do you have the correct policies and procedures in place to either keep you compliant or get you compliant based on the Department of Labor’s standards?

Written by: Patrick Hill, Executive Vice President


Foster Thomasis the Mid-Atlantic region’s leading HR Management Consulting organization.  With over 17 years of experience providing best-in-class HR-focused professional services, Foster Thomas creates custom scalable HR solutions for emerging and mid-sized organizations, government contractors and non-profits