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Fact Sheet:
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.
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
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;
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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
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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
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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;
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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:
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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:
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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
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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
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