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White-Collar Exemptions

The term “white-collar employee” has been used to describe the general class of executive, administrative, professional, computer, and outside sales employees who are exempt from overtime pay requirements. These white-collar exemptions constitute the broadest base of exemptions and cut across all industries.

Have you been incorrectly characterized as exempt from overtime pay? It is a common misconception that all salaried employees in typical “white collar” positions simply are not entitled to overtime compensation. If you do not have the authority to hire and fire, have relatively little discretion when it comes to important decisions, and do not possess an advanced degree, you may well be entitled to overtime for the long hours that you put in. Below is a brief description of the requirements for the “white collar” exemptions. If you do not fit within one of these categories and do not receive overtime pay, your employer may have improperly classified you as “exempt” from the overtime laws:
The Executive Exemption
An employee falls within the executive exemption and is thus not entitled to overtime pay if the employee: read more

  • has as his or her primary duty managing the enterprise in which the employee is employed, or a customarily recognized department or subdivision thereof;
  • customarily and regularly directs the work of two or more other employees;
  • has the authority to hire and fire other employees, or make suggestions and recommendations that give particular weight to such decisions; and
  • is compensated on a salary basis at a rate not less than $455 per week;

The Administrative Exemption

To be deemed “employed in a bona fide administrative capacity,” and therefore not entitled to overtime pay, an employee must: read more

  • primarily perform office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers;
  • exercise discretion and independent judgment with respect to matters of significance; and
  • be compensated on a salary basis at a rate not less than $455 per week;

The Professional Exemption

Exempt professional employees include: “learned” professionals, “artistic” or “creative” professionals, and “teachers.” To be exempt as a learned professional: read more

  • the employee’s primary duty must involve work requiring “advanced knowledge,” i.e., work that 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; and
  • the employee may have to meet certain compensation form and amount requirements depending on the specific profession.

Computer Employees Exemption

An employee is not entitled to overtime pay based on the computer employee exemption only if the primary duty of an individual is one or more of the following: read more

  • 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 specifications;
  • the design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
  • a combination of any of the above duties, the performance of which requires the same level of skills.

The computer professional exemption is limited to analysts, programmers, software engineers, and “other similarly skilled workers in the computer field.” Just because the employee’s work is highly dependent on, or facilitated by, computers does not mean the employee is exempt. Likewise, the exemption does not apply to employees engaged in the manufacture, repair or maintenance of computer hardware and related equipment.

The Outside Sales Exemption

An employee is not entitled to overtime pay based on the outside sales exemption only if the employee’s primary duty consists of: read more

  • making sales or
  • obtaining orders or contracts for the performance of services or the use of facilities by the client or customer.

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