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I'm working as a contract engineer for a staffing company, and I'm contracted full-time to an engineering consultancy. I'm listed as an exempt employee on my offer letter, but I don't know if I qualify as an exempt employee by the FLSA. I'm paid by the hour, and if I work less than 40 hours a week, my pay is reduced. If I work more than 40 hours, I'm paid for the time at my normal rate. I'm a W-2 employee.

I spend the majority of my time working as an engineer, doing design, build, and testing of hardware for the consultancy's customers. I think my job qualifies as a "Learned Professional" by the FLSA, except for the following:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684* per week (DOL Fact Sheet #17d)

Researching this has yielded mixed results. Some say it's allowed for a learned professional to be paid hourly and exempt, others say it's not.

Does this position meet the criteria for exemption?

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  • Do you get a W-2 or a 1099 at tax time? It's an important distinction. 1099 workers are considered independent contractors, and they're paid based on the contract. If you work more than 40 hours a week, do you get more pay? Please edit your question.
    – O. Jones
    Mar 2, 2020 at 16:38
  • @O.Jones I've added detail to clarify.
    – Jonathan Moore
    Mar 3, 2020 at 4:23

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Contact your state's Department of Labor to look into the specifics of your employment and make a ruling. If your state does not have a Department of Labor, contact the federal Department of Labor. You cannot be retaliated against for doing this.

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I'm not an attorney, but I have dealt with similar questions and issues both for myself and the people that I have managed. You really should consult an attorney and your state department of labor for a better understanding of your situation.

I'm paid by the hour, and if I work less than 40 hours a week, my pay is reduced.

This in and of itself generally indicates that you are not a salaried employee, therefore you do not meet the requirements of the exemption. Hourly employees are not exempt.

You should review your offer letter and contract to determine if an hourly rate or a weekly/annual rate is set in the contract. But based on your statement above I'm certain that you are being paid on an hourly basis.

Unfortunately, this type of thing is fairly common in the contract and gig economy. Many people are taken advantage of by no knowing and understanding rules around compensation.

NOTE:

Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year).

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  • Yes, reviewing my contract lists me as receiving an hourly rate, and specifically states that I'm exempt. I've inquired of my handler and she's said I receive overtime as straight time and if I take time off, I'm not paid for that time.
    – Jonathan Moore
    Mar 3, 2020 at 13:22
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    You can be an hourly exempt employee in certain specific cases. Most computer analyst/support/programmer jobs can be exempt while still being hourly (dol.gov/sites/dolgov/files/WHD/legacy/files/fs17e_computer.pdf). Based on "design, build and test hardware" in the question I don't think it would apply but there may be a similar exemption. In the cases where I've been hourly exempt based on the above it has been straight time for hours worked.
    – Jonathan Leech-Pepin
    Mar 3, 2020 at 13:40

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