The Gittes Law Group

Columbus, Ohio Employment Attorneys

723 Oak Street
Columbus, OH 43205
Fax: (614) 221-9655

(614) 222-4735

Overtime Exemptions

Note: The Department of Labor revised the regulations located at 29 C.F.R. part 541 with an effective date of January 1, 2020. The 2004 part 541 regulations will remain in effect through December 31, 2019, including the $455 per week standard salary level and $100,000 annual compensation level for Highly Compensated Employees. The final rule is available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and.

On this page, we’ll do our best to clarify this complicated subject for you, but if you have remaining questions, you may wish to speak to a local attorney who is knowledgeable about overtime, since it is impossible to anticipate every problem that may have arisen in your workplace.

1. I hear certain jobs being referred to as “exempt” or “non-exempt.” What does being “exempt” mean?

The term “exempt” is used to refer to employees and/or jobs that do not qualify for overtime protections, while “non-exempt” refers to employees and/or jobs that are eligible for overtime. There are certain types of jobs which are explicitly exempt from either any protection under the FLSA (including its minimum wage, child labor, and record-keeping provisions) or just the FLSA’s overtime provisions. They include the following types of jobs:

Exempt from all FLSA coverage:

 

Employees of certain seasonal amusement or recreational establishments;

Employees of certain small newspapers and switchboard operators of small telephone companies;

Seamen employed on foreign vessels;

Employees engaged in fishing operations;

Employees engaged in newspaper delivery;

Farm workers employed on small farms (i.e., those that used less than 500 “man days” of farm labor in any calendar quarter of the preceding calendar year);

Casual babysitters and persons employed as companions to the elderly or infirm; and

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) who customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee. (See questions 7-26 below for more information.)

 

Exempt from FLSA overtime coverage:

 

Certain commissioned employees of retail or service establishments;

Auto, truck, trailer, farm implement, boat or aircraft salespersons employed by non manufacturing establishments primarily engaged in selling these items to ultimate purchasers;

Auto, truck, or farm implement parts clerks and mechanics employed by non manufacturing establishments primarily engaged in selling these items to ultimate purchasers;

Railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans;

Announcers, news editors and chief engineers of certain non metropolitan broadcasting stations;

Domestic service workers who reside in their employers’ residences;

Employees of motion picture theaters; and

Farmworkers.

 

If you have one of these types of jobs, you may not be eligible for overtime pay. However, you may wish to speak to a local attorney who is knowledgeable about overtime, as your job may not fully fit the FLSA’s definition of jobs that are excluded from coverage and/or there may be state law exceptions that apply to your job.

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2. My job is not specifically excluded from FLSA coverage. Does this mean I am eligible to collect overtime?

Again, not necessarily. Employees otherwise subject to the FLSA’s protections can still be considered “exempt,” and ineligible for overtime protection, if both of the following criteria are met:

The employee is paid a salary fee (not paid on an hourly basis) of not less than $455 per week, AND

The employee performs the duties of an exempt employee.

For more information on these two subjects, please see the questions below.

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3. What does it mean to be paid on a “salary basis?”

Getting paid a “salary” generally means getting the same amount of pay each week or each pay period no matter how many hours you work that week. For example, if you are paid on a salary basis, you get paid the same if you work 10, 30, 39, 40, or 46 hours per week (or any other number of hours). You must be paid more than $913 per week 47,476 per year) for your salary to satisfy the “salary basis” part of the test for overtime exemption. If you are paid a total annual compensation of $134,004 or more, with at least $913 per week ($47,476 per year) paid on a salary or fee basis, you will be exempt from overtime if you customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee. (See questions 7-26 below for more information.) These values will go into effect December 1, 2016. Until that date, to satisfy the “salary basis” part of the test for the exemption you must be paid more than $455 per week ($23,660 per year). If you are paid a total annual compensation of $100,000 or more with at least $455 per week, you will be exempt from overtime if you customarily and regularly preform at least one duty of an exempt executive, administrative, or professional employee.

Whether an employee is paid on a salary basis is not affected by whether pay is expressed in hourly terms (as this is fairly common in many payroll computer programs), but whether the employee is in fact paid a “guaranteed minimum” amount that is not subject to being docked based on the quality or quantity of work performed.

With a few exceptions, salaried employees cannot have their salary reduced based on the “quality or quantity” of work performed.

For example, if employees receive a salary of $600 per week when they work 40 hours, an employer cannot pay those employees $525 when they work 35 hours (effectively paying the employees $15/hour rather than a salary of $400 per week).

Also, if the employee is ready, willing and able to work, deductions may not be made for time when work is not available, such as, for example, weather or security-related facility closures.

If an employer makes improper deductions to an exempt employee’s salary, it may destroy the “salary basis” of pay and may make the employee nonexempt and entitled to overtime. Employees whose salary is “subject to” reduction for reasons inconsistent with the salary basis of pay may no longer be considered under the law to be paid on a salary basis. Thus, if an employer actually does dock employee salaries, or if there is a specific employment policy requiring reductions in salaries in specified situations, the employer may destroy the salary basis of pay. For more information, see question 6.

The salary basis pay requirement for exempt status does not apply to some of the “learned professions,” such as lawyers, doctors, or school teachers. These jobs are exempt even if the employees are paid hourly. Another exception is for “computer professionals” (as defined under the law), who may be exempt if they are paid on a salary basis or if they are paid hourly at a rate of at least $27.63. This amount has not changed with the new overtime law.Further, the FLSA also allows some exempt employees to be paid on a fee basis, but this is a fairly rare circumstance.

However, under the new overtime rule which will not go into effect until December 1, 2016, the definition of salary basis now allows nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary test. Nondiscretionary bonuses and incentive payments are forms of compensation promised to employees to encourage them to work more efficiently or remain with the company. Examples of these bonuses which may now satisfy a percent of the standard salary test are: meeting set production goals, retention bonuses, and commission payments based on a fixed formula.

This new salary threshold will be updated every three (3) years to account for inflation. The goal is to maintain a level at the 40th percentile of full-time salaried workers in the lowest-wage Census region. The first salary threshold update will be January 1, 2020.

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4. My employer pays me a salary. Does this mean I am not eligible to collect overtime?

There are two factors that determine whether or not you are eligible for overtime. Being paid a salary of $913 per week or more is only one of the two factors. The other requirement is that you perform the duties of an exempt employee. If your duties are not that of an exempt employee, an employer cannot evade overtime requirements by paying you a salary. For more information about the duties test, see question 7.

However, under the new overtime rule which goes into effect December 1, 2016, employers now have new required salary levels to manage overtime and many options to ensure that these employers respond effectively:

Option 1: Employers may raise the salary and keep the employee exempt from overtime, so long as these employees meet the duties test. This option favors employees who have salaries close to the new salary level provided by the overtime rule and regularly work overtime.

Option 2: Employers may pay overtime in addition to the employee’s current salary when necessary—which under the overtime law is 40 hours in a week. This option favors employees who work 40 hours or fewer in a typical workweek, but have occasional periods of time that require overtime for which employers can plan and budget the extra pay during those periods.

Option 3: Employers may evaluate and realign hours and staff workload so that white-collar workers who earn below the salary threshold are not overworked. Thus, employers can see that they may be required to work overtime and can combat that problem in advance by hiring more workers.

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5. When can my employer legally make a deduction from my salary?

There are some circumstances under which an employer can deduct the pay of a salaried employee without failing the salary basis test and causing the employer to be liable for overtime pay. The following deductions are permitted for otherwise exempt employees:

an absence from work for one or more full days for personal reasons other than sickness or disability;

absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness (for example, when an employee is required to use part of a sick time allotment);

to offset amounts employees receive as jury or witness fees, or for military pay;

for penalties imposed in good faith for infractions of safety rules of major significance; or

for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions.

Also, an employer is not required to pay the full salary in the first or last week of an exempt employee’s employment (unless that employee works the full week), or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act.

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6. What happens if my employer makes an illegal deduction from my salary?

The employer will lose the exemption if it has an “actual practice” of making improper deductions from salary. Factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to:

the number of improper deductions, particularly as compared to the number of employee infractions warranting deductions;

the time period during which the employer made improper deductions;

the number and geographic location of both the employees whose salary was improperly reduced and the managers responsible; and

whether the employer has a clearly communicated policy permitting or prohibiting improper deductions.

If an “actual practice” is found, the exemption is lost during the time period of the deductions for employees in the same job classification working for the same managers responsible for the improper deductions.

Isolated or inadvertent improper deductions will not result in loss of the exemption if the employer reimburses the employee for the improper deductions.

Employers have what is called a “safe harbor” provision, which allows them to fix the problem by reimbursing the employee whose pay was wrongly deducted, after a complaint brings the issue to the employer’s attention. If an employer

has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism,

reimburses employees for any improper deductions, and

makes a good faith commitment to comply in the future,

the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints.

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7. What are the types of job duties that cause employees to be exempt from overtime protections?

There are two factors that determine whether or not you are eligible for overtime. Being paid a salary is only one of the two factors. The other requirement is that you perform the duties of an exempt employee. This is sometimes called the “duties test.”

The exemption from overtime is limited to employees who perform relatively high-level work involving a good deal of judgment and discretion. Whether the duties of a particular job or category of job qualify as exempt depends on the nature of the particular duties. This is why the exemptions under the duties tests are also known as “white-collar exemptions,” as they are primarily designed to exempt traditional white-collar jobs from overtime payments, without exempting traditional blue-collar jobs.

In each case, the analysis is based on the “primary duty” of a particular job, which is defined as:

the principal, main, major or most important duty that the employee performs.

This must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.

Job titles or position descriptions are not that useful in making this determination. (For example, a secretary is still a secretary even if she or he is called an “executive assistant”). It is the actual job tasks that must be evaluated (along with where and how the particular job tasks “fit” into the employer’s overall operations). There are three typical categories of exempt job duties, called “executive,” “administrative,” and “professional.”

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8. What executive job duties are considered exempt?

Job duties are considered exempt executive job duties if the employee satisfies all three parts of the following test (in addition to the salary test described above):

Has the primary duty of managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;

Customarily and regularly directs the work of at least two or more other full-time employees or their equivalent; and

Has the authority to hire or fire other employees, or whose suggestions and recommendations as to the employment status of other employees must be given particular weight.

An employee who holds a fancy title implying that he or she is “the boss” but who does not in fact supervise two or more employees or who does not really have the “primary duty of managing the enterprise” is not performing executive job duties. Thus, for example, a “manager” who does a purely production job but has a “manager” title is not performing executive job duties.

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9. How do I know whether I am considered to have the primary duty of “managing the enterprise” or a department or subdivision?

To satisfy the first prong of the executive duties test, you must have the primary duty of managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise.

The definition of “management” includes, but is not limited to, activities such as

interviewing, selecting, and training of employees;

setting and adjusting their rates of pay and hours of work;

directing the work of employees;

maintaining production or sales records for use in supervision or control;

appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status;

handling employee complaints and grievances;

disciplining employees;

planning the work;

determining the techniques to be used;

apportioning the work among the employees;

determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold;

controlling the flow and distribution of materials or merchandise and supplies;

providing for the safety and security of the employees or the property;

planning and controlling the budget; and

monitoring or implementing legal compliance measures.

 

The phrase “a customarily recognized department or subdivision” is intended to distinguish between a mere collection of employees assigned from time to time to a specific job or series of jobs and a unit with permanent status and function.

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10. I manage one full-time and several part-time employees in my unit. The number of part-time employees I supervise depends on project staffing and time of day. Does this mean I am considered an executive?

Possibly, depending on whether you satisfy the other prongs of the executive duties test as well. To satisfy the second prong of the executive duties test, you must customarily and regularly direct the work of at least two or more other employees or their equivalent.

The phrase “customarily and regularly” means greater than occasional but less than constant; it includes work normally done every workweek, but does not include isolated or one-time tasks.

The phrase “two or more other employees” means two full-time employees or their equivalent.

For example, one full-time and two half-time employees are equivalent to two full-time employees. The supervision can be distributed among two, three or more employees, but each such employee must customarily and regularly direct the work of two or more other full-time employees or the equivalent. For example, a department with five full-time nonexempt workers may have up to two exempt supervisors if each supervisor directs the work of two of those workers.

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11. While I can make a recommendation whether particular employees in my branch keep or advance in their jobs, the final decision is made by the corporate office. Am I considered an executive?

It depends. To satisfy the third prong of the executive duties test, you must have the authority to hire or fire other employees, or your suggestions and recommendations as to the employment status of other employees must be given “particular weight.” There are a number of factors to be considered when analyzing particular weight, including but not limited to whether it is part of the employee’s job duties to make such recommendations, and the frequency with which such recommendations are made, requested, and relied upon.

Generally, an executive’s recommendations must pertain to employees whom the executive customarily and regularly directs. It does not include occasional suggestions.

An employee’s recommendations may still be deemed to have “particular weight” even if a higher level manager’s recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee’s change in status.

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12. I own 25% percent of a design business, but one of my partners makes all of the decisions about hiring and firing. Am I considered an executive?

Under a special rule for business owners, if you own at least a 20 % equity interest in the enterprise in which you are employed, regardless of the type of business organization (e.g., corporation, partnership, or other), and you are actively engaged in its management, you are considered an exempt executive.

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13. What administrative job duties are considered exempt?

The most difficult of the three exempt job classifications to analyze is the administrative exemption. Job duties are considered exempt administrative job duties if the employee satisfies both parts of the following test (in addition to the salary test described above):

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

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

Merely clerical work may be administrative, but it is not exempt. Most secretaries, for example, may accurately be said to be performing administrative work, but their jobs are not usually exempt. Similarly, filing, filling out forms and preparing routine reports, answering telephones, making travel arrangements, working on customer “help desks,” and similar jobs are not likely to be high-level enough to be administratively exempt.

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14. How do I know if my work is considered “directly related to management or general business operations of the employer or the employer’s customers”?

To meet the “directly related to management or general business operations” requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example from working on a manufacturing production line or selling a product in a retail or service establishment.

Work “directly related to management or general business operations” includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network, Internet and database administration; legal and regulatory compliance; and similar activities.

Even if an employee’s work is not directly related to the management or general business operations of the employer, an employee may still qualify for the administrative exemption if the employee’s primary duty is the performance of work directly related to the management or general business operations of the employer’s customers. Thus, employees acting as advisors or consultants to their employer’s clients or customers – as tax experts or financial consultants, for example – may be exempt.

However, not all work in this area is considered exempt under the administrative exemption test, as all prongs of the test discussed in question 13 above must be satisfied.

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15. In my position as an executive assistant, I am able to exercise some discretion and independent judgment. How much is enough to satisfy the requirement of “exercise of discretion and independent judgment” with respect to matters of significance?

In general, the exercise of discretion and independent judgment involves your ability as an employee to compare and evaluate possible courses of conduct and act or make a decision after you consider all of the various possibilities. The term must be applied in the light of all the facts involved in your particular employment situation, and implies that you have authority to make an independent choice, free from immediate direction or supervision.

Just because your decisions can be revised or reversed after review does not mean that you are not exercising discretion and independent judgment. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.

Factors to consider include, but are not limited to:

 

Do you have authority to formulate, affect, interpret, or implement management policies or operating practices?

Do you carry out major assignments in conducting the operations of the business?

Do you perform work that affects business operations to a substantial degree?

Do you have authority to commit your employer in matters that have significant financial impact?

Do you have authority to waive or deviate from established policies and procedures without prior approval?

 

The term “matters of significance” refers to the level of importance or consequence of the work performed. You are not considered to exercise discretion and independent judgment with respect to matters of significance merely because your employer will experience financial losses if you fail to perform the job properly. Similarly, if you operate very expensive equipment does not exercise discretion and independent judgment with respect to matters of significance merely because improper performance of your duties may cause serious financial loss to the employer.

Some primarily clerical workers do in fact exercise some discretion and independent judgment in their jobs. However, to “count” the exercise of judgment and discretion must be about matters of considerable importance to the operation of the enterprise as a whole. Routinely ordering supplies (and even selecting which vendor to buy paper clips from) is not likely to be considered high-level enough to qualify the employee for administratively exempt status. Some “secretaries” may indeed be high-level, administratively exempt employees (if they are paid on a salary basis), while some employees with fancy titles (e.g., “administrative assistant”) may really be performing nonexempt clerical duties. Each job must be evaluated on a position-by-position and company-by-company basis.

One example of administratively exempt work is that of buyers for a department store. They perform nonmanual or office work and are not engaged in production or sales. The job involves work directly related to the general business operations of the employer: selecting merchandise to be ordered as inventory. Their work involves the exercise of a good deal of important judgment and discretion, since it is up to the buyers to select items which will sell in sufficient quantity and at sufficient margins to be profitable. The work is a matter of significance, since having the right inventory (and the right amount of inventory) is crucial to the overall well-being of the store’s business. (This is not to say that all buyers would be administratively exempt, but that buyers whose jobs are similarly structured are likely to qualify for the administrative exemption.)

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16. In my position at a school, I have been told that my job is exempt. Are there special exceptions for school administrators?

Education-related job duties are considered exempt administrative job duties if the employee satisfies the following test (in addition to the salary test described above):

The employee’s primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment., which applies to adjunct members as well as tenure track.

Academic administrative functions include operations directly in the field of education, and do not include jobs relating to areas outside the educational field.

Employees engaged in academic administrative functions include:

the superintendent or other head of an elementary or secondary school system, and any assistants responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the learning potential and achievement of students, establishing and maintaining academic and grading standards, and other aspects of the teaching program;

the principal and any vice-principals responsible for the operation of an elementary or secondary school;

department heads in institutions of higher education responsible for the various subject matter departments;

academic counselors and other employees with similar responsibilities.

The new overtime rule which goes into effect December 1, 2016 further clarified that Tthe teaching exemption also applies to:

Students in research jobs under the supervision of a faculty member while obtaining a degree;

Coaches and assistant coaches so long as the primary duty is teaching. This includes instructing athletes on how to perform a sport. However, if their primary duty is recruitment or manual labor, coaches are not considered teachers.

Having a primary duty of performing administrative functions directly related to academic instruction or training in an educational establishment includes, by its very nature, exercising discretion and independent judgment with respect to matters of significance.

However, because the salary for overtime will be raised significantly to $47,476 on December 1, 2016 from $23,660, higher education employees who may not have historically been eligible for overtime, may now be eligible if their salary is not adjusted to accommodate for this new law to be in effect on December 1, 2016.

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17. What professional job duties are considered exempt?

When thinking about professionals, people typically think of doctors, lawyers, and teachers. However, the professional category includes other professions as well.

There are two types of professionals recognized by this category of overtime exemption:

 

learned professionals

creative professionals

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18. Who is considered to be a “learned professional”?

Job duties are considered exempt learned professional job duties if the employee satisfies all three parts of the following test (in addition to the salary test described above):

Has the primary duty of performing work requiring advanced knowledge, defined as work which is predominantly intellectual in character (which includes work requiring the consistent exercise of discretion and judgment);

 

The advanced knowledge must be in a field of science or learning

The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

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19. What does the law consider to be “work requiring advanced knowledge”?

The definition of “work requiring advanced knowledge” is work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment.

Professional work is therefore distinguished from work involving routine mental, manual, mechanical or physical work. A professional employee generally uses the advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level.

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20. What is considered a “field of science or learning”?

Fields of science or learning include law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other occupations that have a recognized professional status and are distinguishable from the mechanical arts or skilled trades where the knowledge could be of a fairly advanced type, but is not in a field of science or learning.

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21. How is “customarily acquired by a prolonged course of specialized intellectual instruction” defined?

The learned professional exemption is restricted to professions where specialized academic training is a standard prerequisite for entrance into the profession. The best evidence of meeting this requirement is having the appropriate academic degree. However, the word “customarily” means the exemption may be available to employees in such professions who have substantially the same knowledge level and perform substantially the same work as the degreed employees, but who attained the advanced knowledge through a combination of work experience and intellectual instruction. This exemption does not apply to occupations in which most employees acquire their skill by experience rather than by advanced specialized intellectual instruction.

The FLSA distinguishes the exercise of judgment and discretion from the application of particular skills, even high-level skills. A lumber grader, for example, may be highly trained in distinguishing subtle variations in wood but is not performing professionally exempt job duties.

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22. Are teachers considered “learned professionals?”

Teachers are exempt, if

their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and

they are employed and engaged in this activity as a teacher in an educational establishment.

Exempt teachers include, but are not limited to, regular academic teachers; kindergarten or nursery school teachers; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrument music teachers.

The salary and salary basis requirements do not apply to bona fide teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge includes, by its very nature, exercising discretion and judgment.

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23. I have a law degree, but my job does not actually entail practicing law. Am I considered a “learned professional” just because I have a degree?

No. An employee holding a valid license or certificate permitting the practice of law or medicine is exempt if the employee is actually engaged in such a practice, and the new overtime law has not changed this requirement. (Your job duties may cause you to be exempt on other grounds, but your degree alone does not automatically make your job exempt on the basis of being a learned professional.) An employee who holds the requisite academic degree for the general practice of medicine is also exempt if he or she is engaged in an internship or resident program for the profession. The salary and salary basis requirements do not apply to bona fide practitioners of law or medicine.

Similarly, an engineer doing real engineering work is performing professionally exempt job duties, but an engineer working as a technician is not. An accountant doing accounting is performing professionally exempt work, but a CPA whose job is really bookkeeping is not.

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24. Who is considered to be a “creative professional”?

Job duties are considered exempt creative professional job duties if the employee satisfies the following test (in addition to the salary test described above):

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.

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25. I am an inventive and talented employee, but surely that doesn’t make me a “creative professional.” What does the law consider to be “invention, imagination, originality or talent”?

This requirement distinguishes the creative professions from work that primarily depends on intelligence, diligence and accuracy. Exemption as a creative professional depends on the extent of the invention, imagination, originality or talent exercised by the employee. Whether the exemption applies, therefore, must be determined on a case-by-case basis. The requirements are generally met by actors, musicians, composers, soloists, certain painters, writers, cartoonists, essayists, novelists, and others as set forth in the regulations. Journalists may satisfy the duties requirements for the creative professional exemption if their primary duty is work requiring invention, imagination, originality or talent. Journalists are not exempt creative professionals if they only collect, organize and record information that is routine or already public, or if they do not contribute a unique interpretation or analysis to a news product.

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26. What are the “recognized fields of artistic or creative endeavor”?

This includes such fields as, for example, music, writing, acting and the graphic arts.

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27. I work with computers: how does the law apply to me?

The increasing use of computers in business has generated some special rules in the FLSA defining “computer professionals.”

To qualify for the computer employee exemption, the employee:

 

Must be compensated either on a salary or fee basis at a rate not less than $913 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;

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:

 

The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

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;

The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

A combination of the above duties, the performance of which requires the same level of skills.

 

The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment (although employees in these jobs may be exempt as executives or administrators if their actual job duties fit within those definitions). Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations identified in the primary duties test described above, are also not exempt under the computer employee exemption.

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28. I am a salesperson who visits current and potential customers in the field (known as “outside sales”). How does the law apply to me?

There is a specific exemption for outside sales employees, and this rule has not been changed with the new overtime law effective December 1, 2016However, to qualify for the outside sales employee exemption, you must meet all of the following tests:

Your 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

You must be customarily and regularly engaged away from the employer’s place or places of business.

The salary test does not apply to the outside sales exemption. If you do not satisfy the requirements of the outside sales exemption, you may still qualify as an exempt employee under one of the other exemptions described above in questions 7-26.

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29. How does the law define “making sales” or “obtaining orders or contracts for services or for the use of facilities”?

“Sales” includes any sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition. It includes the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property.

Obtaining orders for “the use of facilities” includes the selling of time on radio or television, the solicitation of advertising for newspapers and other periodicals, and the solicitation of freight for railroads and other transportation agencies. The word “services” extends the exemption to employees who sell or take orders for a service, which may be performed for the customer by someone other than the person taking the order.

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30. I do some of my sales work in the field, calling on current and potential customers. I do some phone sales work in my company’s offices, and also do some promotional work in additional to my sales activities. Am I considered an “outside salesperson”?

The legal test for being considered exempt as an outside salesperson is that you must be “customarily and regularly engaged away from the employer’s place or places of business.”

The phrase “customarily and regularly” means greater than occasional but less than constant. It includes work normally done every workweek, but does not include isolated or one-time tasks.

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.

Promotion work may or may not be exempt outside sales work, depending upon the circumstances under which it is performed. Promotional work that is actually performed incidental to and in conjunction with an employee’s own outside sales or solicitations is exempt work. However, promotion work that is incidental to sales made, or to be made, by someone else is not exempt outside sales work.

Whether you are considered an outside salesperson would depend how often you are in the field, and whether your contacts over the phone lead to contact in the field, or whether phone calls are your sole sales contact with these particular clients.

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31. I drive a truck and sell food products door-to-door. I also deliver items that customers have ordered over the phone or Internet to their door. Is that considered “outside sales”?

Drivers who deliver products and also sell such products may qualify as exempt outside sales employees only if the employee has a primary duty of making sales. Several factors should be considered in determining whether a driver has a primary duty of making sales, including but not limited to:

 

a comparison of the driver’s duties with those of other employees engaged as drivers and as salespersons,

the presence or absence of customary or contractual arrangements concerning amounts of products to be delivered,

whether or not the driver has a selling or solicitor’s license when required by law, and

the description of the employee’s occupation in collective bargaining agreements.

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32. Who enforces the law?

The FLSA is enforced by the Wage-Hour Division of the U.S. Department of Labor. Wage-Hour’s enforcement of FLSA is carried out by investigators stationed across the U.S., who conduct investigations and gather data on wages, hours, and other employment conditions or practices, in order to determine whether an employer has complied with the law. Where violations are found, they also may recommend changes in employment practices to bring an employer into compliance.

It is a violation to fire or in any other manner discriminate against an employee for filing a complaint or for participating in a legal proceeding under FLSA.

Willful violations may be prosecuted criminally and the violator fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage requirements are subject to a civil money penalty of up to $1,000 for each such violation.

The FLSA makes it illegal to ship goods in interstate commerce which were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions.

To contact the Wage-Hour Division for further information and/or to report a potential FLSA minimum wage violation, call:

Toll Free: (866) 4USWAGE (866-487-9243)
TTY: (877) 889-5627 (available Monday-Friday 8 a.m. to 5 p.m. Eastern Time)

You may also contact your local WHD office.

If you need further information about your state’s overtime law and/or wish to report a potential state overtime law violation, then you may wish to contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.

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33. What are the remedies available to me?

There are several different methods under the FLSA for an employee to recover unpaid overtime wages; each method has different remedies.

Wage-Hour may supervise payment of back wages.

The Secretary of Labor may bring suit for back wages and an additional penalty, called “liquidated damages,” which can be equal to the back pay award (essentially doubling the damages) if an employer willfully violated the statute.

An employee may file a private lawsuit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs. An employee may not bring a lawsuit if he or she has been paid back wages under the supervision of Wage-Hour or if the Secretary of Labor has already filed suit to recover the wages.

The Secretary of Labor may obtain an injunction to restrain any person from violating FLSA, including the unlawful withholding of proper overtime pay.

 

Your state overtime law may have different methods for recovery of unpaid wages, and different remedies to be awarded to those who succeed in proving a violation. For further information, please contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.

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34. How do I file a complaint/How long do I have to file?
To file a complaint for unpaid overtime wages under the FLSA, you may either go to the WHD, which may pursue a complaint on your behalf, or file your own lawsuit in court (which may require you to hire an attorney).

Do not delay in contacting the WHD or your state agency to file a claim. There are strict time limits in which charges of unpaid wages must be filed. To preserve your claim under federal law, you must file a lawsuit in court within 2 years of the violation for which you are claiming back wages, except in the case of an employer’s willful violation, in which case a 3-year statute applies. However, as you might have other legal claims with shorter deadlines, do not wait to file your claim until your time limit is close to expiring. You may wish to consult with an attorney prior to filing your claim, if possible. Yet if you are unable to find an attorney who will assist you, it is not necessary to have an attorney to file your claim with the state and federal administrative agencies.

Your state overtime law may have different deadlines for recovery of unpaid wages. For further information, select your state from the map below or from this list.

united states map

Washington Oregon Idaho Montana North Dakota Nevada Utah Arizona California New Mexico Colorado Wyoming South Dakota Nebraska Kansas Texas Oklahoma Louisiana Mississippi Arkansas Alabama Tennessee Missouri Iowa Minnesota Wisconsin Michigan Illinois Indiana Florida Georgia South Carolina North Carolina Virginia Kentucky Ohio West Virginia Pennsylvania New York Vermont Massachusetts Rhode Island Connecticut New Jersey Delaware Maryland Maine New Hampshire District of Columbia Alaska Hawaii
 

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