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Exempt Employee

By , About.com Guide

Definition: This is an employee who is defined by the Federal Labor Standards Act (FLSA) as being exempt from this law's minimum wage and overtime requirements. According to the Wage and Hours Division of the US Department of Labor, only "bona fide executive, administrative, professional and outside sales employees" who meet certain requirements are exempt from minimum wage and overtime laws.

An employee is not considered exempt simply because of his or her job title. In addition to earning a salary of at least $455 per week, one's job duties must follow a set of rules established by the FLSA. These rules differ depending on the type of employee one is. For example, to be considered an executive for the purposes of qualifying for the exemption, the employee's primary job duties must involve "managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise." In addition, he or she must supervise at least two full-time employees and have the authority to hire or fire other workers or be able to significantly influence those decisions.

To qualify for the administrative exemption, one's primary duties must include office work that is directly related to the business operations of the employer or its customers. The administrative employee also must use his or her own judgement when dealing with important matters.

The professional exemption requires that one's work be intellectual in nature and must be in a field of science or learning. The employee must be trained to perform that work in advance through "a course of specialized intellectual instruction," according to the FLSA's specifications. To be considered a creative professional, the employees work must be in a recognized creative or artistic field.

Computer systems analysts, computer programmers and computer software engineers are exempt as long as their work involves a combination of primary duties that include applying systems analysis techniques and procedures and consulting with users to determine specifications, and designing, developing, analyzing, creating, testing and modifying computer systems and programs.

Outside salespeople who work at locations other than the employer's primary place of business, making sales or obtaining orders from customers are considered exempt as well. Blue collar workers, including manual laborers are always subject to overtime or minimum wage laws as set forth by the FLSA. First responders like police officers, firefighters and paramedics must also be paid for overtime as required by the law, and at least minimum wage.

Source: Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)

Also Known As: salaried employee
Common Misspellings: excempt employee
Examples:
Although Jennifer worked 50 hours last week, as an exempt employee she wasn't eligible for overtime pay.

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