What is an Exempt Employee?

See If You are Subject to the Fair Labor Standards Act

Business man checks notes while on phone
Reza Estakhrian/Stone/Getty Images

An exempt employee is a worker who is not subject to the minimum wage and overtime requirements of the U.S. Federal Labor Standards Act (FLSA). This law mandates that employers must pay most workers, usually referred to as non-exempt employees, the Federal or state minimum wage (whichever is higher). They must also compensate them at a rate of at least one and a half times their regular rate of pay for any time worked above 40 hours per week.

How to Tell If You Are an Exempt Employee

You will want to determine whether you are an exempt employee because, if not, you may have some money coming your way. Remember, unless you are exempt, your employer must pay you overtime and the minimum wage, as specified by the FLSA. If that organization has classified you as an exempt worker, you should double-check to make sure this is correct.

According to the Wage and Hours Division of the U.S. Department of Labor, only "bona fide [genuine] executive, administrative, professional, computer, and outside sales employees" who meet certain requirements are exempt from minimum wage and overtime requirements. Job title alone will not keep you from earning the minimum wage or getting extra money for working more than 40 hours a week. Your earnings come into play, and your job duties must meet certain specifications, depending on what type of employee you are.

First, look at your most recent paycheck. Do you earn at least $455 weekly? If you do, decide if you are one of these types of employees: executive, administrative, professional, computer, or outside sales. Then answer the questions below the one that applies to you, if any do.

Executive Employee

Your job title may be "manager, " but you may not meet all the requirements for what the FLSA considers an executive employee.

If you don't, you may be entitled to overtime pay and the minimum wage. Ask yourself the following questions:

  • Does your job mostly consist of managing the company or a department?
  • Do you supervise at least two full-time employees?
  • Can you hire or fire workers, or, at least, contribute to the decision to do so?

Your answers to all of these questions have to be "yes" for you to be exempt from receiving overtime pay or the minimum wage.

Administrative Employee

Respond to these questions to find out if the FLSA would classify you as an administrative employee:

  • Do you primarily perform office work that directly relates to the business operations of your employer or its customers?
  • Do you use judgment when making decisions about important matters?

Did you answer in the affirmative to these questions? If not, it may be time to talk to your boss about overtime pay and the minimum wage.

Professional Employee

There are two types of professional employees: learned and creative. Do you fit into one of these categories?

  • Is your work intellectual in nature?
  • Are you employed in a field of science or learning?
  • Were you trained to perform that work through specialized study, for example in law, accounting, engineering or another field typically considered to be a profession?

    If you answered "yes" to these questions, The FLSA considers you a "learned" professional. You aren't eligible for overtime pay or the minimum wage.

    Let's see if you are, instead, a creative professional and, under FLSA rules, ineligible for overtime pay:

    • Does your work involve invention, originality, or talent in a recognized creative or artistic field such as writing, music, performing arts, or graphic arts?

    If it does, your paycheck won't increase even if you work all night.

    Computer Employees

    Are you a computer systems analyst, computer programmer,  or computer software engineer, or do you work in another computer science occupation that requires similar skills? You probably aren't eligible for the minimum wage or overtime pay if you work in one of these jobs, but to be sure, answer the following questions:

    • Do you apply systems analysis techniques and procedures?
    • Do you consult with computer users to determine specifications?
    • Do you design, develop, analyze, create, test, and modify computer systems and programs?

    If you answered "yes" to at least two of these questions, you are probably an exempt employee.

    Outside Sales Employee

    Some sales representatives are entitled to get paid the minimum wage or earn overtime pay, and some are not. If you answer "yes" to the following questions, you won't be seeing anything additional in your paycheck whether you work 40 hours a week or 80.

    • Do you sell goods or services for which clients or customers pay?
    • Do you mostly work outside your employer's primary place of business?

    Can You Perform Only One of the Duties Listed Above and Still Be Exempt?

    You may perform just one of the functions of an exempt executive, administrative, professional, computer, or outside sales employee and are getting ready to walk into your boss's office to demand your overtime pay. Before you start dreaming about how you are going to spend your fortune, there's one more thing that may identify you as an exempt employee. You aren't covered by the overtime provisions of the FLSA if you are considered a "highly compensated employee." Answer these questions to see if you meet this test:

    • Do you perform office duties and non-manual work?
    • Do you earn at least $100,000 per year, including salary or fees of at least $455 per week? 

    The good news is your annual salary is at least $100,000. The bad news is you won't make more than that just by working late. Maybe it's time to ask for a raise.

    What Types of Workers Are Never Exempt?

    Blue collar workers and first responders are never exempt from the minimum wage and overtime provisions of the FLSA. Blue collar workers use their hands, physical skill and energy to do their jobs. They include construction workers, electricians, carpenters and reinforcing iron and rebar workers. First responders are police officers, firefighters, and paramedics.

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

    Disclaimer: Please note that the information contained on this page as well as elsewhere on this website is for guidance, ideas, and assistance only. Dawn Rosenberg McKay makes every effort to offer accurate advice and information on this site, but she is not an attorney. Therefore, the content published here is not to be construed as legal advice. Employment laws and regulations vary by location so check government resources or legal counsel when in doubt about your particular situation.