Overtime Exemptions

–Report Unpaid Overtime–

Who Is Exempt From Overtime?

The Fair Labor Standards Act (FLSA) provides an exemption from overtime pay (and minimum wage) for employees employed as bona fide executive, administrative, professional, outside sales employees. FLSA also exempts certain computer employees. An exempt employee is one who is not entitled to the minimum wage or overtime pay protections of the FLSA. A nonexempt employee is one who is entitled to the minimum wage and/or overtime pay protections of the FLSA.

General Exemption Requirements:

For the FLSA section 13(a)(1) exemptions to apply, an employee generally must be paid on a salary basis of no less than $455 per week and perform certain types of work that:

  • is directly related to the management of his or her employer’s business, or
  • is directly related to the general business operations of his or her employer or the employer’s clients, or
  • requires specialized academic training for entry into a professional field, or
  • is in the computer field, or
  • is making sales away from his or her employer’s place of business, or
  • is in a recognized field of artistic or creative endeavor.

Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.

Administrative, professional and computer employees may also be paid on a “fee basis” rather than on a salary basis. If the employee is paid an agreed sum for a single job, regardless of the time required for its completion, the employee will be considered to be paid on a “fee basis.” To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $455 per week if the employee worked 40 hours.

Job titles alone do not determine the exempt or non-exempt status of any employee. Each determination is based on the specific job duties performed and compensation received.

Executive Exemption

To qualify for the executive employee exemption:

  • The employee must be compensated on a salary basis at a rate not less than $455 per week;
  • 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
  • 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:

  • The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
  • The employee’s primary duty (“primary duty” means the principal, main, major or most important duty that the employee performs) 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 (i.e., directly related to assisting with the running or servicing of the business); and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance (i.e., the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term implies that the employee has authority to make an independent choice, free from immediate direction or supervision).

Learned Professional Exemption

To qualify for the learned professional employee exemption:

  • The employee must be compensated on a salary or fee basis 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.

Creative Professional Exemption

To qualify for the creative professional employee exemption:

  • 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 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 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:

  • The employee’s primary duty must be making sales, 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
  • The employee must be customarily and regularly engaged away from the employer’s place or places of business.

An outside sales employee makes sales at the customer’s place of business, or, if selling door-to-door, at the customer’s home. Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.

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 above apply only to “white collar” employees who meet the salary and duties tests. 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 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.

–Report Unpaid Overtime–

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8 Responses to “Overtime Exemptions”

  1. Jason A. Pomar says:

    I have 33 weeks of paychecks where I was paid straight time for working as as a manager for a company. I was an hourly wage earner and averaged 51-52 hrs per week. Am I entitled to unpaid wages?

  2. vince says:

    I am an exempt employee working in a QC lab. Our work is highly standardized which I thought excluded us from being considered exempt. We have OT built into our schedule, 36 hrs 1 week & 48 the next. We have always been paid time & a half for this, but now they are talking about making it straight time. Can they do this if it is your regular schedule and you have no choice but to work it?

  3. j kennedy says:

    For the last seven years i have been able to take a paid holiday and work overtime in the same week. Now the employer is saying if we take a holiday and come in on the fourth day and work overtime it will be caculated as straight time. this also would include forced overtime. For example I took a paid holiday on Monday, worked tuesday through Friday, then was forced to work friday evening due to lack of staff. the company can pay me straight time for that evening shift. Is this legal?

  4. Robert Davis says:

    I am a full time employee at a local retail store. I am “told” that I must work over my scheduled shift to finish certain projects and in doing so I must take another lunch 29 minutes after the original shit begins. I am then required to take that overtime off so I won’t go over the original 40 hrs. scheduled. Can they force me to work that overtime and should they make me leave early so they don’t have to pay me that overtime?

  5. Richard Robertson says:

    Worker works as a Staff Accountant for a British company in Nevada. Worker has an immediate Supervisor who regulary requires worker to work 50-60 hours per week. Worker is classified as exempt. Worker has a Bachelors degree but is not authorized to make major decisions on behalf of a large company. Would the worker be exempt from overtime pay in this circumstance?

  6. Kirk Sanders says:

    I am a salary non-exempt employee who is paid 40 hours regardless of my work week. My employer states that I am not to receive overtime unless I work phyically work 40 hours if I am only give 30 hours out of the week to work then I am not required OT pay eventhough I receive 40 hours regardless. I am assigned weekend work majority of the time. The company cut my salary 3,000 per year telling us in writing that the will make up the diference in OT.But due to the fact that they will not give OT unless I physically work, the decrease in pay has hurt my take home pay. Is this correct.

    Kirk Sanders
    Randolph MA

  7. John says:

    I work for a County EMS system and we work 24 on 48 off schedule like fire departments. We provide 911 service but all we do is EMS. We are a 56 hour employee and do not get any overtime. Our employer says we fall under the “guaranteed salary” and we are exempt from overtime, can this be true?

  8. joe stanton says:

    I work for a vending machine company and am being paid 500.00 per wk while training. I was told that is a salary and they are working me 62 hrs per week. Is a person in training Exemp from overtime?

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