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Other Types of White-Collar Exemptions

 

Outside Salespeople

 

Outside salespeople fall into a special category of exempt employees who do not have to receive either a salary or fee, or, for that matter, minimum wage or overtime pay; many such employees receive only a commission, while others receive that plus occasional bonuses, dividends, or overrides, depending upon the individual pay agreement in effect. Under 29 C.F.R. 541.500, an "outside sales employee" is someone who is "customarily and regularly engaged" away from the employer's place of business in making sales or obtaining orders for the sale of goods or services (see also 29 C.F.R. 541.501 - 541.502, which define the terms "making sales or obtaining orders" and "away from the employer's place of business"). The main thing to remember is that the pay for such an employee will be determined by the compensation agreement.

 

Computer Professional

 

There is yet another important "white collar" exemption that does not necessarily require a salary to be valid, that being the exempt "computer professional". The definitions found in 29 C.F.R. 541.400 (former regulations 541.3(a)(4) and 541.303) apply the exemption to any computer employee paid on a salary or fee basis at least $455 per week, exclusive of board, lodging, or other facilities, or else paid an hourly wage of not less than $27.63 an hour. In addition, the exemptions apply only to computer employees whose primary duty consists 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.

The regulations exclude workers who build or install computer hardware or who are merely skilled computer operators; they make clear that the exemption applies only to the true software programming, design, or systems analysis experts. A DOL letter ruling of December 4, 1998 (BNA, WHM 99:8201) states that this exemption does not include employees who "provide technical support for business users by loading and implementing programs to businesses' computer networks, educating employees on how to use the programs, and by aiding them in troubleshooting." See also DOL opinion letter FLSA2006-42 (October 26, 2006), as well as court decisions in Hunter v. Sprint Corp., 453 F.Supp.2d 44 (D.C. 2006) and Martin v. Ind. Mich. Power Co., 381 F.3d 574 (6th Cir.2004). As those decisions point out, typical help desk functions such as "responding to ... help desk tickets", "installing software ... on individual workstations", "troubleshooting Windows 95 problems", and "configuring desktops, checking cables, and replacing parts" are not covered by the computer professional exemption. Properly speaking, the exemption applies only to the very top experts in computer software or systems, i.e., the ones who actually write the software programs, or who design, implement, and maintain a company's network software, intranet, or Internet presence. An employee who fits this exemption may be paid on an hourly basis with no premium for overtime work, i.e., straight-time pay for all hours worked, as long as the hourly rate is at least $27.63 per hour. However, the employer could still choose to pay such a person on a salary basis without having to worry about extra straight-time pay if the employee meets the salary and duties tests for this exemption.

 

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