The 5 Most Common FLSA Exemptions

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

The 5 Most Common FLSA Exemptions

The most common FLSA exemptions are white collar exemptions. They can be broken down into five main categories, including:

  1. Executive
  2. Administrative
  3. Professional
  4. Outside sales
  5. Computer

In order for an exemption to apply, an employee’s specific job duties and salary must meet all of the requirements of the Department of Labor’s regulations.

Here is how the FLSA defines exemptions for these various duties.

1. Executive

An employee is exempt from the FLSA as an executive if they regularly perform all of the following:

  1. The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
  2. The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  3. The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  4. 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.

2. Administrative

This exemption is for employees whose main duties involve the support of the business, such as human resource staff, public relations, payroll and accounting. Generally, administrative employees do not directly produce what the company sells; however, they are at a much higher level than those employees performing clerical work.

The FLSA defines exempt administrative duties as follows:

  1. 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;
  2. 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
  3. The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

3. Professional

Exempt professional employees include lawyers, physicians, teachers, architects, registered nurses, and other employees who perform work that requires advanced education or training. These typically are intellectual jobs, require specialized education and involve the use of discretion and judgment. 

This exemption also includes creative professionals such as writers, journalists, actors and musicians. In general, such jobs require imagination and some unique combination to the employer. 

  1. 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;
  2. 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;
  3. The advanced knowledge must be in a field of science or learning; and
  4. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

4. Outside Sales

To qualify for the outside sales employee exemption, all of the following tests must be met:

  1. The employee's primary duty is to make sales or the employee's primary duty is to obtain orders or contracts for services or contracts for the use of facilities for which clients or customers pay
  1. The employee must be customarily and regularly engaged away from the employers place or places of business.

The salary requirements of the regulation do not apply to the outside sales exemption. An employee who does not satisfy the requirements of the outside sales exemption may still qualify as an exempt employee under one of the other exemptions allow

5. Computer

A computer professional can be paid on a salaried or hourly basis, but must receive compensation equal to or greater than:

  • $455 per week if paid on a salary basis (annual salary of $23,660); or,
  • $27.63 per hour, if paid for each hour worked.

Job titles do not determine the exemption status. In order for this exemption to apply, an employee’s specific job duties and compensation must meet all the requirements of the FLSAs regulations. However, the computer exemption does state that an employee must be employed as a:

  • Computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field; and,
  • 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.

If you have any additional questions regarding common FLSA exemptions, and are an ERC Member, contact our HR Help Desk or visit the U.S. Department of Labor (DOL) FLSA page at http://www.dol.gov/whd/flsa/.

By providing you with information that may be contained in this article, the Employers Resource Council (ERC) is not providing a qualified legal opinion concerning any particular human resource issue. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application. We also recommend that you consult your legal counsel regarding workplace matters when and if appropriate.

HR, compliance, termination, or compensation questions?

ERC has a team of HR Help Desk Advisors to provide timely and trusted answers.

Contact the Help Desk