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Exempt or Non-Exempt?

The Fair Labor Standards Act (FLSA) is a federal law that sets minimum wage, overtime pay among other things. 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 work week. Section 13(a)(1) of the FLSA provides an exemption from the minimum wage and overtime provisions for bona fide executive, administrative, professional, outside sales employees, and section 13(a)(17) may also exempt certain employees in computerrelated areas. Three criteria are used to determine if an employee meets one of these white collar exemptions: salary level, salary basis, and job duties. An additional exemption may apply to highly compensated employees who are paid at least $100,000 a year. This chart is a summary of requirements for certain exemptions under the Fair Labor Standards Act. Category
Executive

Pay
Salary basis of at least $640 in CA, other states $455 a week.

Primary Job Duties


Primary duty is management of the enterprise or of a customarily recognized department or subdivision. Customarily and regularly directs the work of two or more full-time employees (or the equivalent). Has the authority to hire or fire other employees or whose suggestions and recommendations as to hiring, firing, advancement, promotion, or other change of status of other employees are given particular weight. Primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employers customers. Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Primary duty is the performance of work requiring advance knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. Primary duty is the performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor. Customarily means the exemption may also be available to such professionals who have substantially the same knowledge level and perform same work as the degreed professional but attained the knowledge through a combination of work experience and intellectual instruction. Employed as a computer systems analyst, computer programmer, software engineer, or similarly skilled worker in the computer field. Primary duty must consist of the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system functional specifications; or 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; or The design, development, documentation, creation, testing, or modification of computer programs related to machine operating systems; or A combination of the duties listed above, the performance of which requires the same level of skills. Selling tangible or intangible items; or obtaining orders or contracts for services or use of facilities. Regularly and customarily working away from the employers place of business. Performs office or non-manual work. Customarily and regularly performs at least one of the duties of an exempt executive, administrative, or professional employee identified in the standard tests for exemption.

Administrative

Salary or fee basis of at least $640 in CA, other states $455 a week. Salary or fee basis of at least $640 in CA, other states $455 a week (except for doctors, lawyers, teachers). Salary basis of at least $455 a week or hourly if paid at least $27.63 an hour. In CA, $36.00 hourly rate or $1442.30 per week.

Professional

Computer Software Professionals

Outside Sales Personnel Highly Compensated Employees

No salary level or salary basis requirement. Total annual compensation of $100,000 or more (which must include at least $455 a week, $640 in CA, paid on a salary or fee basis).

This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations. Please consult your Human Resources Department for further assistance, or U.S. Department of Labor Wage and Hour Division.

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