FLSA Exemption Classification Audit Checklist

Inspection template for auditing exempt employee classifications against the salary basis and duties tests to identify misclassification risk under the Fair Labor Standards Act.

Audit Scope and Employee Identification

• Employee record and job title match the classification being audited
• Primary work location and business unit documented
• Exemption category identified
• Review period defined and current job description version attached

Salary Basis Test

• Guaranteed salary meets or exceeds the applicable minimum threshold
• Salary is paid on a predetermined basis not reduced by quantity or quality of work
• Improper deductions were not made during the audit period
• Docking rules, partial-day absence handling, and leave policies support salary basis compliance
• Any exceptions or pay adjustments were reviewed for FLSA impact

Duties Test Review

• Actual duties align with the selected exemption category
• Employee customarily and regularly exercises discretion and independent judgment where required
• Employee's primary duty is exempt work rather than non-exempt production or clerical work
• Time allocation between exempt and non-exempt tasks reviewed
• Supervisory authority, professional credentials, or specialized knowledge supports exemption basis where applicable

Documentation and Payroll Controls

• Job description reflects current duties and exemption rationale
• Manager and HR approvals documented for the classification decision
• Payroll system setup matches exempt status and salary basis rules
• Any prior complaints, audits, or corrections related to classification were reviewed

Corrective Actions and Sign-Off

• Deficiencies or non-conformances documented with specific evidence
• Corrective action plan assigned with owner and due date
• Reclassification or legal review required based on findings
• Inspector signature