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Fact Sheet #17A: Exemption
for Executive, Administrative, Professional, Computer & Outside
Sales Employees Under the Fair Labor Standards Act (FLSA)
This fact sheet provides general
information on the exemption from minimum wage and overtime pay
provided by Section 13(a)(1) of the Fair Labor Standards Act as
defined by Regulations, 29 CFR Part 541.
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The
FLSA requires that most employees
in the United States be paid at least the Federal minimum wage for
all hours worked and overtime pay at time and one-half the regular
rate of pay for all hours worked over 40 hours in a workweek.
However, Section 13(a)(1) of the FLSA
provides an exemption from both minimum wage and overtime pay for
employees employed as bona fide
executive,
administrative,
professional and
outside sales employees. Section 13(a)(1) and Section 13(a)(17)
also exempt certain
computer employees. To qualify for exemption, employees
generally must meet certain tests regarding their job duties and be
paid on a salary basis at not less than $455 per week. Job titles
do not determine exempt status. In order for an exemption to apply,
an employee’s specific job duties and salary must meet all the
requirements of the Department’s regulations.
See other fact sheets in this series
for more detailed information on the specific exemptions for
executive,
administrative,
professional,
computer,
and
outside sales employees, and for more information on the
salary basis requirement.
Executive Exemption
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To qualify for the executive employee
exemption, all of the following tests must be met:
-
The employee must be compensated on
a
salary basis (as defined in the regulations) at a rate not
less than $455 per week;
-
The employee’s primary duty must be
managing the enterprise, or managing a customarily recognized
department or subdivision of the enterprise;
-
The employee must customarily and
regularly direct the work of at least two or more other full-time
employees or their equivalent; and
-
The employee must have the authority
to hire or fire other employees, or the employee’s suggestions and
recommendations as to the hiring, firing, advancement, promotion
or any other change of status of other employees must be given
particular weight.
Administrative Exemption
To qualify for the administrative
employee exemption, all of the following tests must be met:
-
The employee must be compensated on
a
salary or fee basis (as defined in the regulations) at a rate
not less than $455 per week;
-
The employee’s primary duty must be
the performance of office or non-manual work directly related to
the management or general business operations of the employer or
the employer’s customers; and
-
The employee’s primary duty includes
the exercise of discretion and independent judgment with respect
to matters of significance.
Professional Exemption
To qualify for the learned
professional employee exemption, all of the following tests must
be met:
-
The employee must be compensated on
a
salary or fee basis (as defined in the regulations) at a rate
not less than $455 per week;
-
The employee’s primary duty must be
the performance of work requiring advanced knowledge, defined as
work which is predominantly intellectual in character and which
includes work requiring the consistent exercise of discretion and
judgment;
-
The advanced knowledge must be in a
field of science or learning; and
-
The advanced knowledge must be
customarily acquired by a prolonged course of specialized
intellectual instruction.
To qualify for the creative
professional employee exemption, all of the following tests must
be met:
-
The employee must be compensated on
a
salary or fee basis (as defined in the regulations) at a rate
not less than $455 per week;
-
The employee’s primary duty must be
the performance of work requiring invention, imagination,
originality or talent in a recognized field of artistic or
creative endeavor.
Computer Employee Exemption
To qualify for the computer employee
exemption, the following tests must be met:
-
The employee must be compensated
either on a
salary or fee basis (as defined in the regulations) at a rate
not less than $455 per week or, if compensated on an hourly
basis, at a rate not less than $27.63 an hour;
-
The employee must be employed as a
computer systems analyst, computer programmer, software engineer
or other similarly skilled worker in the computer field performing
the duties described below;
-
The employee’s primary duty must
consist of:
1) The application of systems analysis
techniques and procedures, including consulting with users, to
determine hardware, software or system functional specifications;
2) The design, development,
documentation, analysis, creation, testing or modification of
computer systems or programs, including prototypes, based on and
related to user or system design specifications;
3) The design, documentation, testing,
creation or modification of computer programs related to machine
operating systems; or
4) A combination of the aforementioned
duties, the performance of which requires the same level of skills.
Outside Sales Exemption
To qualify for the outside sales
employee exemption, all of the following tests must be met:
-
The employee’s primary duty must be
making sales (as defined in the FLSA), or obtaining orders or
contracts for services or for the use of facilities for which a
consideration will be paid by the client or customer; and
-
The employee must be customarily and
regularly engaged away from the employer’s place or places of
business.
Highly Compensated Employees
Highly compensated employees
performing office or non-manual work and paid total annual
compensation of $100,000 or more (which must include at least $455
per week paid on a salary or fee basis) are exempt from the FLSA if
they customarily and regularly perform at least one of the duties of
an exempt executive, administrative or professional employee
identified in the standard tests for exemption.
Blue Collar Workers
The exemptions provided by FLSA
Section 13(a)(1) apply only to “white collar” employees who meet the
salary and duties tests set forth in the Part 541 regulations. The
exemptions do not apply to manual laborers or other “blue collar”
workers who perform work involving repetitive operations with their
hands, physical skill and energy. FLSA-covered, non-management
employees in production, maintenance, construction and similar
occupations such as carpenters, electricians, mechanics, plumbers,
iron workers, craftsmen, operating engineers, longshoremen,
construction workers and laborers are entitled to minimum wage and
overtime premium pay under the FLSA, and are not exempt under the
Part 541 regulations no matter how highly paid they might be.
Police, Fire Fighters, Paramedics &
Other First Responders
The exemptions also do not apply to
police officers, detectives, deputy sheriffs, state troopers,
highway patrol officers, investigators, inspectors, correctional
officers, parole or probation officers, park rangers, fire fighters,
paramedics, emergency medical technicians, ambulance personnel,
rescue workers, hazardous materials workers and similar employees,
regardless of rank or pay level, who perform work such as
preventing, controlling or extinguishing fires of any type; rescuing
fire, crime or accident victims; preventing or detecting crimes;
conducting investigations or inspections for violations of law;
performing surveillance; pursuing, restraining and apprehending
suspects; detaining or supervising suspected and convicted
criminals, including those on probation or parole; interviewing
witnesses; interrogating and fingerprinting suspects; preparing
investigative reports; or other similar work.
Other Laws & Collective Bargaining
Agreements
The
FLSA provides minimum standards
that may be exceeded, but cannot be waived or reduced. Employers
must comply, for example, with any Federal, State or municipal laws,
regulations or ordinances establishing a higher minimum wage or
lower maximum workweek than those established under the FLSA.
Similarly, employers may, on their own initiative or under a
collective bargaining agreement, provide a higher wage, shorter
workweek, or higher overtime premium than provided under the FLSA.
While collective bargaining agreements cannot waive or reduce
FLSA
protections, nothing in the FLSA or the Part 541 regulation relieves
employers from their contractual obligations under such bargaining
agreements. |
Personnel
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