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Can an exempt position become nonexempt?

Jan 2007

Q. A nonexempt employee was given the duties of an exempt employee upon the exempt employee's retirement. The nonexempt employee had been acting in this capacity for over four years. Does the employer lose the ability to classify this position/employee now as exempt? Is there a time limit?

A. Generally, it is not the employee who determines whether a job is exempt from the Fair Labor Standards Act (FLSA); it is the tasks being performed in the job that do or do not warrant the exemption.

You did not mention what tasks the previous employee was performing when he or she left the company. It could be this employee had been performing tasks that warranted the exemption status. When the employee left the company, it is possible that the company could no longer justify the position as exempt.

Companies often get into trouble when they have exempted a job from the FLSA when the job does not meet the requirements for exemption under the law. In such a case, the company may have to pay an employee overtime incurred while performing the job while being treated as exempt. These payments could be retroactive.

So I would encourage you to ask your HR representative why the FLSA status changed when the previous employee left the company.

Good luck.

- Erisa Ojimba, Certified Compensation Professional

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