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SR Glossary: Exemption to DoL Overtime Rules

The U.S. Department of Labor and the State of Michigan have regulations which state that an employee shall receive compensation at not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours.

However, the following are exempt:

Some examples of employees and their qualifications:

Administrative employees would be the employees that most your businesses might have. Qualifications for exemption must meet all of the following conditions for this group:

Discretion and independent judgment essentially, means that the employee has the ability and freedom to make an independent choice, free from supervision.

Examples of non qualifying duties: Bookkeeper, secretaries, bank tellers and clerical employees who perform routine work are not generally considered exempt employees. The mere discretion of when to perform clerical tasks does not qualify as “discretion and independent judgment.”

Computer employees would only qualify if they meet the compensation test above and are employed as:

Learned Professionals will qualify if:

Creative Professionals will qualify if:

Retail salespersons on salary or commissions need not be paid overtime rates if:

The above examples are simplistic examples of a complicated area of Wage and Hour Laws.  You may think that just because an employee receives a large salary, he/she would be exempt from overtime rules. But that is not always the case.  If you have questions about the nuances of your employees’ roles contact us [1].  We can help steer you through this landmine filled area of business.