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Performance evaluations are not mandatory, according to the U.S. Department of Labor. They are a matter between you and your employees or your employees' representative. Performance evaluations help you to determine merit increases and come up with employee development strategies.
No law requires companies to conduct job reviews, but businesses that do may have a better understanding of their employees. The information gained from performance reviews can be used to determine raises, succession plans and employee-development strategies.
The FLSA includes these job categories as exempt: professional, administrative, executive, outside sales, and computer-related. The details vary by state, but if an employee falls in the above categories, is salaried, and earns a minimum of $684 per week or $35,568 annually, then they are considered exempt.
Exempt Employees must meet basic salary threshold of $913/week $47,476/year) and meet applicable Department of Labor Tests for executive exemption, administrative exemption, professional exemption, or computer exemption. Exempt employees are paid a salary that covers the amount of time required to perform the job.
An employer must thereafter evaluate the productivity of each worker with a disability who is paid an hourly commensurate wage rate at least every 6 months, or whenever there is a change in the methods or materials used or the worker changes jobs.
Under federal law, it's illegal to discriminate against a worker on the basis of age (over 40), disability, race, nationality, gender, religion or pregnancy status. Many states add additional categories to this list, too.
Performance appraisals can be highly useful in the talent management process and can help ensure that employers are doing their best to retain high-performing employees.
The Fair Labor Standards Act (FLSA) does not require performance evaluations. Performance evaluations are generally a matter of agreement between an employer and employee (or the employee's representative).
Who is eligible for overtime pay? To qualify as an exempt employee one who does not receive overtime pay staff members must meet all the requirements under the duties and salary basis tests.