Final answer:
An employee must meet the salary basis test, the salary level test, and the duties test to be considered exempt from FLSA protections.
Step-by-step explanation:
The Fair Labor Standards Act (FLSA) outlines specific criteria for determining whether an employee is exempt from certain protections, including overtime and minimum wage requirements. An exempt employee must meet three specific tests:
- The salary basis test requires the employee to be paid a fixed salary that is not subject to reduction based on the quality or quantity of work.
- The salary level test establishes a minimum salary threshold that the employee must earn.
- The duties test assesses whether the employee's job responsibilities are executive, administrative, professional, outside sales, or specific computer-related roles.
Should an employee not meet these criteria, they are not considered exempt and are entitled to overtime pay and other FSLA protections. Figuring out FSLA exemption is crucial for employers to avoid legal issues, such as those arising from racial discrimination lawsuits, where an employee must demonstrate unequal pay for similar work compared to coworkers of a different race. It's also relevant to the buyer's side of the labor market, where employers may use trial periods as a precaution against unsuitable hires.