Table of Contents Index Previous Page Next Page    Top Ten Tips    Disclaimer

 

Duties Tests

 

The DOL has set forth special tests for the executive, administrative, and professional exemption categories (29 C.F.R. 541.100, 541.200, and 541.300 (former regulations 541.1, 541.2, and 541.3, respectively)). They all have minimum weekly salary levels, as well as a requirement that the employee's primary duty be devoted to exempt duties. Each test has important distinguishing factors. For example, an "executive" has the primary duty of management of a company or subdivision of a company; supervises two or more employees; and has authority to hire, fire, and promote employees, or else greatly influences such decisions. An "administrative" employee performs office or non-manual work related to the management or general business operations of the company or its customers; customarily and regularly exercises discretion and independent judgment with respect to matters of significance; and makes decisions of substantial importance to the organization as a whole. A "creative professional" 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." "Learned professionals" perform work requiring "advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction", exercise discretion and independent judgment in performing job duties, and perform work that is generally incapable of standardization with respect to time.

 

Examples of occupations typically encountered in the exempt categories:

 

Primary Duty

In each category, the employee's "primary duty" must be exempt in nature. "Primary duty" is defined in 29 C.F.R. 541.700 (former regulation 541.103). As that regulation indicates, a duty in which the employee spends "more than 50 percent" of their work time is presumed to be the primary duty. However, the same regulation notes that in cases where the employee happens to spend 50 percent or less of the workweek in exempt duties, the exempt duties may still be the primary duties depending upon the following criteria:

  1. the relative importance of the managerial duties as compared with other types of duties;

  2. the amount of time spent performing exempt work;

  3. the employee's relative freedom from direct supervision; and

  4. the relationship between the employee's salary and the wages paid other employees for the kind of non-exempt work performed by the supervisor (or other type of exempt employee).

These criteria have been widely accepted by courts around the country. Some courts have related the second criterion to the frequency with which the employee exercises discretionary powers.

 

Executive Exemption

Effective August 23, 2004, the Department of Labor (DOL) regulation 29 C.F.R. 541.100, all parts of which must be satisfied, defines an executive exempt employee as any employee who is:

  1. Compensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging, or other facilities;

  2. Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;

  3. Who customarily and regularly directs the work of two or more other employees; and

  4. Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.

 

Administrative Exemption

DOL regulation 29 C.F.R. 541.200 defines an administrative exempt employee as one who is:

  1. Compensated on a salary or fee basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging, or other facilities;

  2. Whose primary duty is 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

  3. Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

 

Professional Exemption

Under regulation 29 C.F.R. 541.300, DOL distinguishes between two categories of exempt professional employees: "learned professionals" and "creative professionals". The exemption applies to any employee who is:

  1. Compensated on a salary or fee basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging, or other facilities; and

  2. Whose primary duty is the performance of work:

    1. Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or

    2. Requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

 

As 29 C.F.R. 541.301 notes, the primary duty test for learned professionals includes three elements:

  1. The employee must perform work requiring advanced knowledge;

  2. The advanced knowledge must be in a field of science or learning; and

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

 

Regarding creative professionals, 29 C.F.R. 541.302(a) notes that "to qualify for the creative professional exemption, an 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 as opposed to routine mental, manual, mechanical, or physical work. The exemption does not apply to work which can be produced by a person with general manual or intellectual ability and training."

 

Return to Businesses & Employers
Return to TWC Home