Paying an exempt employee for work outside his normal duties

Q         If an exempt employee is asked to help on a proposal (not part of his normal job duties) and he expected to be compensated but wasn't, is that an issue? Someone also asked him to track his time. Can we pay him a bonus instead?

A   Under the Fair Labor Standards Act (FLSA), employees are categorized as either “exempt” or “nonexempt.” The categories are determined by (a) how much an employee is paid, (b) how the employee is paid, and (c) what kind of work the employee does. In general, an exempt employee is paid by salary. On the other hand, a nonexempt employee is usually paid hourly for at least the federal minimum wage. A nonexempt employee is entitled to time and half of her regular rate if she works more than 40 hours in a given pay week, but she is not entitled to overtime pay. Some employers may create an incentive program for exempt employees with extra perks in lieu of overtime pay.

When determining whether an employee is exempt or nonexempt, the employer must evaluate whether the employee’s job requires her to perform the duties of an exempt employee. This test is sometimes referred to as the “duties test.” The duties test examines whether the employee is primarily engaged in relatively high-level work involving a good amount of judgment and discretion. There are three typical types of exempt job duties: executive, administrative, and professional.