2.1 Employee Classifications The following terms are used to describe employees and their employment status: Exempt Employees An exempt employee is a classification under the Fair Labor Standards Act (FLSA) that refers to employees who are not entitled to overtime pay regardless of the number of hours worked beyond the standard 40-hour workweek. Exempt employees are typically salaried and must meet specific criteria related to job duties, salary level, and salary basis.
Non-exempt Hourly/Regular Employee Employees who are hired to work on a regular schedule. Such employees can be either full-time or part-time. The distinction between full-time and part-time depends upon the number of hours that an employee works. Full-Time Employees who are not temporary employees, independent contractors, or independent consultants, and who are regularly scheduled to work a schedule of 37.5 hours per work week. These employees generally have a predictable and structured schedule. They also may qualify for Company-sponsored benefits. Part-Time Employees who are not temporary employees, independent contractors, or independent consultants and who are regularly scheduled to work less than 37.5 hours per work week but a minimum of 20 hours per week. Regular Part-Time employees, including seasonal employees, are eligible for limited benefits from Midwest Fastener Corp. The benefits include 401(K), paid time off (PTO), and unpaid personal time (UTO). Temporary Employees Employees who are hired as interim replacements to supplement the workforce or to assist in the completion of a specific project. Employment assignments in this category are of limited duration, and the temporary employee can be let go before the end of the defined period. Short-term assignments are periods of six (6) months or less, however, such assignments may be extended. All temporary employees are at-will, regardless of the anticipated duration of the assignment (see Employment-at-Will Policy). Temporary employees retain that status unless and until notified in writing of a change.
To qualify as exempt, an employee must generally
• Be paid on a salary basis rather than hourly. • Earn a minimum salary that meets or exceeds the FLSA threshold. • Perform executive, administrative, professional, computer, or outside sales job duties as defined by federal regulations.
Because exempt employees do not receive overtime compensation, they are expected to complete their job responsibilities regardless of the time required. Nonexempt Employees Employees whose positions do not meet specific tests established by the FLSA and state law. All employees who are covered by the federal or state minimum wage and overtime laws are considered nonexempt. Employees working in nonexempt jobs are entitled to be paid at least the minimum wage per hour and a premium for overtime. Non-exempt Salaried/Regular Employee Employees who receive overtime pay in accordance with Company overtime policy. In addition to their standard salary, their wage will include a calculated
hourly overtime rate benefit for any additional hours over 40 per week.
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