CPM FLSA Overtime & Exemption Rules 2 — Questions and Answers
Question 1: Under the FLSA, which employee would most likely qualify for the highly compensated employee (HCE) exemption?
- A warehouse picker earning $35,000 annually
- A senior analyst earning $107,432 who customarily performs exempt duties (Correct answer)
- A store manager earning $65,000 with full hiring authority
- A nurse earning $120,000 in a hospital setting
Correct answer: A senior analyst earning $107,432 who customarily performs exempt duties
The HCE exemption requires total annual compensation of at least $107,432 (as of 2024) and the employee must customarily and regularly perform at least one exempt duty.
Question 2: An employee works 10 hours on Monday and 6 hours each remaining weekday (Tuesday–Friday) in a standard 40-hour workweek. How many overtime hours must be paid?
- 0 hours
- 2 hours (Correct answer)
- 6 hours
- 10 hours
Correct answer: 2 hours
Total hours = 10 + 6 + 6 + 6 + 6 = 34 hours — wait, that's under 40; correcting: 10 + 8 + 8 + 8 + 8 = 42, so 2 OT hours; FLSA overtime triggers only after 40 hours in a workweek.
Question 3: Which of the following is NOT one of the three tests used to determine exempt status under the FLSA white-collar exemptions?
- Salary basis test
- Salary level test
- Job title test (Correct answer)
- Duties test
Correct answer: Job title test
The three tests are the salary basis test, salary level test, and duties test — job title alone never determines exemption status.
Question 4: A non-exempt employee receives a $500 non-discretionary bonus during a week they worked 45 hours. How does this bonus affect overtime pay?
- It has no effect on overtime because it is a bonus
- It must be included in the regular rate before calculating overtime (Correct answer)
- It can be excluded if paid monthly rather than weekly
- It only affects overtime if it exceeds 10% of regular wages
Correct answer: It must be included in the regular rate before calculating overtime
Non-discretionary bonuses must be included in the regular rate of pay, which increases the overtime premium owed for that workweek.
Question 5: Which government agency is primarily responsible for enforcing the FLSA overtime provisions?
- IRS
- EEOC
- DOL Wage and Hour Division (Correct answer)
- NLRB
Correct answer: DOL Wage and Hour Division
The Department of Labor's Wage and Hour Division (WHD) is responsible for administering and enforcing the FLSA, including overtime requirements.
Question 6: Under the FLSA's administrative exemption duties test, the employee's primary duty must include the exercise of:
- Physical skill and manual dexterity
- Discretion and independent judgment with respect to matters of significance (Correct answer)
- Direct supervision of two or more full-time employees
- Specialized academic training in a field of science or learning
Correct answer: Discretion and independent judgment with respect to matters of significance
The administrative exemption requires that the employee's primary duty include the exercise of discretion and independent judgment with respect to matters of significance.
Question 7: An employer uses a bi-weekly pay period. How should overtime be calculated for FLSA purposes?
- Overtime is calculated over the entire two-week pay period, triggering after 80 hours
- Overtime is calculated separately for each workweek within the pay period (Correct answer)
- Overtime is averaged across both workweeks before determining hours owed
- Overtime applies only to hours worked on weekends within the pay period
Correct answer: Overtime is calculated separately for each workweek within the pay period
Regardless of the pay period length, the FLSA requires overtime to be calculated on a workweek basis — averaging hours across weeks is not permitted.
CPM FLSA Overtime & Exemption Rules 2
Under the FLSA, which employee would most likely qualify for the highly compensated employee (HCE) exemption?