05-14-2003 Council Agenda - Laserfiche WebLink

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leagued Minnesota Cabs Cities pm,noting excellence Fact Sheet #2 League of Minnesota Cities 145 University Avenue West St. Paul, MN 55103 (651) 281-1200 TDD: (651) 281 -1290 Fax: (651) 281 -1299 Toll Free: (800) 925 -1122 www.lmnc.org (Note: This is not a substitute for legal advice. Fact sheets provide a brief overview of employment laws. Cities should consult an attorney when dealing with any specific situation.) Fair Labor Standards Act (FLSA): Determining Exempt vs. Non - Exempt Status The Fair Labor Standards Act (29 U.S.C.A. §201 -219) requires, among other things, that cities must compensate covered employees at the rate of time and one -half for hours worked over 40 in one workweek. This Fact Sheet discusses which employees are covered (non- exempt) employees and which are not covered (exempt) employees. See Fact Sheets #1 and #3 for discussion of other aspects of the FLSA. All cities are covered by the FLSA, but some employees are "exempt" from the overtime provisions of the act. To be "exempt," employees must meet both of two separate tests: 1) duties test; and 2) salary basis test. Being "salaried" does not mean the same thing as being "exempt." Duties Test There are generally three types of duties that employees must perform in order to meet the "duties" test and be considered exempt: Executive, Administrative, and Professional. Executive Duties: Executive employees must be paid at least $250 per week and • ✓ Have the primary duty of managing a recognized agency, department or subdivision (generally means at Least 50% of the employee's time). "Managing" includes: interviewing, selecting and training employees; setting hours and directing employees' work; evaluating employee performance; handling employee complaints /grievances; disciplining employees; planning work and determining techniques; and providing for employee safety. ✓ Supervise two or more employees (80 hours worth of employee work per week). ✓ Regularly exercise a high degree of discretion and independent judgement. "Exercising discretion and independent judgment is described as: a) working without close supervision; b) making decisions which are significant to the organization but not necessarily final; c) not the same as merely applying skills and procedures. ✓ Not spend more than 20% of their time on non - management functions. Administrative Duties: Administrative employees must be paid at least $250 per week, and: ✓ Primarily perform office or non - manual work directly related to management policies or general business operations. (If the employee's primary duty is to administer the business affairs of a city, the employee is an administrator. If the employee's primary duty is providing goods /services of the organization, the employee is a "production" employee.) ✓ Have as a primary duty work requiring the exercise of discretion and independent judgment (50% or more of his /her time).