Exempt Employees

Exemptions to the FLSA are not based on job title but on the employee's actual duties, responsibilities, and level of discretionary authority. In addition, for most exempt employees, minimum salary requirements must be met. Listed below are specific classifications that the U.S. Department of Labor has determined in their FairPay Overtime Initiative.

Visit the U.S. Dept of Labor website for more information

Executives
The main duty of an executive is to manage an enterprise, a department, or a departmental subdivision. To be classified as an executive, a person must direct the work of at least two workers, have hiring/firing authority, and use discretionary powers. No more than 20% (40% if retail) of the executive's workweek can be spent in nonexempt work. The executive must be paid a minimum weekly salary of $455. Executives include department managers and supervisors who are directly associated with management decisions and the direction of the staff.

Administrative employees
The main duty of exempt administrative employees is either (1) the performance of office work related to management policies or general business operations or (2) the administration of a school system. Employees and people who perform special assignments are exempt administrative employees. One test an administrator must meet is the use of independent judgment and discretion. Like executives, no more than 20% (40% if retail) of an administrative employee's workweek can be spent in nonexempt work. An exempt administrative employee must also be paid a weekly salary of at least $455. Examples of administrative exempt employees might include executive secretaries or confidential administrative assistants.

Learned or Creative Professionals
Professionals must use discretion and independent judgment in their work. The work must be intellectual and varied, not standardized. No more than 20% of a professional's workweek can be spent in nonexempt tasks. The minimum weekly salary an exempt professional employee must be paid is $455. The main work of professional exempt employees requires either;

    (a) Advanced knowledge customarily acquired by specialized study or

    (b) Originality and creativity. 

Teachers, engineers, and attorneys are examples of professional employees.

Computer Professionals

Those in highly skilled computer software occupations fall into another category of professional employees. The main duties of exempt computer professionals must include systems analysis, system or program design, or computer programming. To qualify, employees must be proficient in their field. The same minimum salary threshold of $455 per week is applicable, but computer professionals paid by the hour may also be exempt if their hourly rate exceeds $27.63.

Outside Salespeople
Outside salespeople are exempt if they meet two requirements: (1) they are customarily engaged in selling or getting orders for the company's product/service and (2) they spend less than 20% of their workweek in non-sales activities. There is no salary requirement for outside salespeople.

Highly Compensated Employees

Employees performing office or non-manual work and who are paid total annual compensation of $100,000 or more are exempt from FLSA overtime regulations. This rule only applies if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, learned or creative professional.

Special Exemptions
The U.S. Department of Labor has classified many occupation specific rules in how overtime is applied. Payroll Dynamics suggests visiting the DOL website prior to making any determinations.