Rule Atlas
FLSA: FLSA Compliance: Overtime, Exemptions, and Recordkeeping
Under FLSA (SHRM BASK / DOL / EEOC / NLRB), fLSA Compliance: Overtime, Exemptions, and Recordkeeping establishes the authoritative rules tested on the SHRM-CP. This lesson details the Fair Labor Standards Act (FLSA) requirements for overtime calculations, specific exemption criteria (executive, administrative, professional, outside sales, computer), and mandatory recordkeeping for compensation and hours worked. VoraPrep verifies every threshold, worked table, and practice question below against the current SHRM-CP blueprint.
Current Statutory Thresholds & Limits in Effect
Non-discretionary bonuses must be allocated back into total remuneration when computing the weighted-average regular rate.
Core Statutory Concepts
| Exemption Category | Primary Duty Test | Salary Level Test | Salary Basis Test |
|---|---|---|---|
| Executive | Managing the enterprise or a recognized department/subdivision; customarily and regularly directing the work of two or more other employees; authority to hire/fire or make recommendations | Yes ($684/week) | Yes |
| Administrative | Performance of office or non-manual work directly related to the management or general business operations of the employer or its customers; exercise of discretion and independent judgment with respect to matters of significance | Yes ($684/week) | Yes |
| Professional | Performance of work requiring advanced knowledge (learned professional) or original and creative work (creative professional) | Yes ($684/week) | Yes |
| Outside Sales | Making sales or obtaining orders/contracts away from the employer's place of business | No (no salary level requirement) | No (no salary basis requirement) |
| Computer Employee | Application of systems analysis techniques and procedures, design/development of computer systems/programs, or similar work; must be paid at least $684/week on a salary basis or $27.63/hour | Yes ($684/week or $27.63/hour) | Yes (if paid salary) |
A growing software development firm is hiring a new 'Project Coordinator' role. The HR Director needs to determine if this position, which involves supervising 2-3 junior developers and has primary duties focused on project execution, can be classified as exempt from overtime under federal law. The firm intends to pay all employees on a salary basis. What is the minimum weekly salary threshold the Project Coordinator must meet to potentially qualify for an FLSA white-collar exemption, assuming all other duties tests are met?
Practitioner Application: FLSA Compliance: Overtime, Exemptions, and Recordkeeping
A rapidly growing tech startup has been classifying all its software developers as exempt under the computer employee exemption, paying them a fixed salary regardless of hours worked. An internal audit reveals that many developers regularly work 60+ hours a week and their primary duty involves configuring existing software, not developing new systems or performing highly analytical tasks. The company is now facing potential class-action lawsuits for unpaid overtime. As the HR Director, you must determine the company's FLSA liability, reclassify employees correctly, and implement compliant payroll practices, all while minimizing financial exposure and maintaining employee morale. The exam question will present a similar scenario, requiring you to identify the correct exemption status and the resulting overtime obligations.
- The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. It is a cornerstone of US employment law, ensuring fair labor practices. Compliance with FLSA is critical for all organizations.
- Defining 'Workweek' and Overtime Pay The FLSA defines a workweek as a fixed and regularly recurring period of 168 hours (seven consecutive 24-hour periods). It does not have to coincide with the calendar week. Overtime pay is generally required for all hours worked over 40 in a workweek at a rate of at least one and one-half times an employee's regular rate of pay. The 'regular rate of pay' includes all remuneration for employment paid to, or on behalf of, the employee, with certain exceptions (e.g., gifts, discretionary bonuses, payments for time not worked).
Common SHRM-CP Distractors on FLSA
- 1FLSA Scope: Establishes minimum wage, overtime, and recordkeeping standards.
- 2Workweek: Seven consecutive 24-hour periods (168 hours).
- 3Overtime Pay: 1.5 times the regular rate of pay for hours over 40 in a workweek for non-exempt employees.
- 4Exemptions: White-collar exemptions (Executive, Administrative, Professional, Outside Sales, Computer) require meeting all three tests: Salary Basis, Salary Level ($684/week), and Duties.
- 5Duties Test: The primary duty is paramount; job titles are insufficient.
Frequently Asked Questions: FLSA
What is the core rule under FLSA (FLSA Compliance: Overtime, Exemptions, and Recordkeeping)?
Under FLSA (SHRM BASK / DOL / EEOC / NLRB), fLSA Compliance: Overtime, Exemptions, and Recordkeeping establishes the authoritative rules tested on the SHRM-CP. This lesson details the Fair Labor Standards Act (FLSA) requirements for overtime calculations, specific exemption criteria (executive, administrative, professional, outside sales, computer), and mandatory recordkeeping for compensation and hours worked. VoraPrep verifies every threshold, worked table, and practice question below against the current SHRM-CP blueprint.
How is FLSA tested on the SHRM-CP?
FLSA Scope: Establishes minimum wage, overtime, and recordkeeping standards. Workweek: Seven consecutive 24-hour periods (168 hours).
Where can I practice SHRM-CP questions on FLSA Compliance: Overtime, Exemptions, and Recordkeeping?
Test yourself instantly with the free playable SHRM-CP question on this page, or launch VoraPrep's full SHRM-CP adaptive question bank, interactive lessons, and 1:1 exam simulator at voraprep.com/shrm.