Hourly vs. Salary Employment
The supervisors of Northwest University have a responsibility to promote a fair and productive working community. Supervisors should refer to these general employment guidelines to foster a fair and equitable work environment as well as ensure compliance with state and federal statutes.
Nonexempt – Non-exempt employees are employees who, because of the type of duties performed, the usual level of decision making authority, and the method of compensation, are subject to all Fair Labor Standards Act (FLSA) provisions including the payment of overtime.
Exempt – Exempt employees are employees who, because of their positional duties and responsibilities and level of decision making authority, are exempt from the overtime provisions of the FLSA. They do not get paid overtime pay. Exempt employees are expected to work whatever hours are necessary to accomplish the goals and deliverables of their exempt position. Exempt employees are not entitled to overtime pay.
Independent Contractors – An individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. Independent contractors are not employees.
Interns – a student or trainee who works, sometimes without pay, to obtain hands-on work experience in a particular occupational field.
There are two types of interns:
- Paid Intern – If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek. If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled compensation under the FLSA.
- Unpaid Intern – According to the U.S. Department of Labor, an unpaid internship is only lawful in the context of an educational training program, when the interns do not perform productive work and the employer derives no benefit. If the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience.
The Test for Unpaid Interns – If all six of the following criteria are met, the trainees are not considered employees IF:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
As a matter of law, the University follows state guideline minimum wage laws for Washington State and for the extension sites in Oregon. Please refer to Minimum Wage Laws by State.
Overtime Pay – Non-exempt employees are required to account for hours worked and must be compensated for all hours worked overtime (more than 40 hours per week) at the premium (time-and-one-half) their rate of pay.