Toeing the Line


Exemptions to Overtime DOL Final Rule Still on Hold


The Department of Labor rewrote the regulations regarding the salaries of “exempt” employees from overtime. The new regulation raising the minimum salary of “exempt” employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). The new rule was to take effect on December 1, 2016. Schools and employers worked frantically to make sure measures were in place to follow the new rule; however, on November 22, a federal judge in Texas put a restraining order on the implementation of the new rule.


As of the writing of this article, that rule is still on hold as the court waits to see what the new administration and leadership in the DOL will do with the final rule. Most believe the Trump administration will move to do away with the final rule and write a new one. However, only time will tell.


With the new rule in a holding pattern, let’s review the overtime laws that remain in effect, as they have since 2004.


The Fair Labor Standards Act (FLSA) states that every employee is to be paid a minimum wage, given a 40- hour workweek, and paid time-and-a-half for hours worked over 40 in a workweek. However, there are some exemptions to this law.


There are three categories of exemption from overtime. Each has specific duties requirements, as well as a minimum wage of $455 per week. The categories and the qualifications for exemption are as follows:


Executive Category


To qualify as exempt under the executive category, the individual must:


1. Manage an enterprise, department, or subdivision as a primary duty


2. Direct the work of at least two full-time employees


3. Have authority to hire and fire or to make recommendations on hiring and firing Administrator Category


To qualify as exempt under the administrator category, the individual must:


1. Be responsible either for office work directly related to management or general operations or for work directly related to academic instruction or training at a school


2. Regularly exercise discretion and individual judgment in matters of significance (as opposed to merely following procedures) and have authority to make important decisions


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3. Regularly assist an owner or an executive or perform work that requires special training or experience under only general supervision


Professional Category


To qualify as exempt under the professional category, the individual must:


1. Have knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study or has talent in a recognized field of artistic endeavor


2. Do work that requires the consistent exercise of discretion and judgment in its performance


3. Do work that is predominantly intellectual and varied in character—not routine physical, mental, manual, or mechanical work


What about administrators and teachers? Do they have to meet the salary of $455 per week? The answer is no. Here is a short summary of both administrators and teachers.


Academic Administrators


This exemption falls under the administrator category and is available only to academic administrators in the school. This would include principals, assistant principals, guidance counselors, admissions directors, and others who are administrators involved in the academic functions.


This exemption is available to employees compensated on a salary or fee basis at a rate not less than $455 a week, or on a salary basis which is at least equal to the entrance salary for teachers in the same educational establishment, and whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment.


Teachers


There is a subcategory under the professional exemption for teachers. Surprisingly, it does not require a college degree to qualify for the exemption. Simply teaching in a classroom setting qualifies a person as exempt.


Teachers serving in K–12 automatically qualify for the professional exemption category whether or not they earn $455 per each week employed. A teacher qualifies for the overtime exemption by virtue of the position alone. Also some state laws do require a minimum salary for teachers.


This is a short summary. More details of FLSA for Christian schools can be found atwww.acsi.org/leg- resources.


© 2017 by the Association of Christian Schools International


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