The Risks of Blending Exempt and Non-Exempt Work

By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published May 2, 2023

Within the working world, all exempt employees, including high-level leadership positions, will perform some routine or non-exempt work on occasion. However, performing too much of this work can run afoul of the Fair Labor Standards Act (FLSA), and the employee’s exemption status could be jeopardized. 

As a reminder, exempt employees are not eligible for overtime, while non-exempt employees are, and must be paid time and a half for hours worked over 40.

Prior to 2004, the FLSA used a long test that limited the amount of non-exempt work to 20% or less for exempt workers. However, the rules were changed in 2004 and that specific language was dropped.

Now, the FLSA exemption tests look at the employee’s primary duty, defined as “the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.”

Although the amount of time an employee spends performing primary duties is not the single determining factor of the exemption status, when a worker is performing a myriad of non-exempt work it becomes harder to substantiate the employee’s exempt classification.

This issue can become increasingly problematic when employers are short-staffed. Unfilled job openings and employee absences can cause exempt employees to take on additional non-exempt job tasks. Employers should be cautious of the extent, duration, and frequency of these job duty changes and perform FLSA re-analysis of the job as necessary. 

A second problematic scenario involves employees who hold two separate jobs for the same employer. One recent HR Hotline caller had a full-time exempt accounting employee who was interested in extra income, and asked if they could do miscellaneous part-time warehouse work on the weekend. 

Although employees may perform more than one job for an organization, an employee may only have one FLSA designation - either exempt or non-exempt. If an employee works two different jobs for an employer, the exemption status is based on the combination of all work performed, as if the employee were performing one job.

In the case of the exempt accounting employee, it is highly probable the additional non-exempt warehouse work would no longer allow the employee to remain in an exempt status. Thus, the employee would become non-exempt for both jobs, and overtime would need to be paid on all hours worked over 40 in a week. The regular rate of pay used to calculate the overtime would be the weighted average of the employee’s two rates of pay.

HR Source members looking for exemption support are encouraged to use our Field Guide to Employee Classification which includes our FLSA Flowchart. Members with questions can contact us through the HR Hotline online or at 800-448-4584.