Under the Fair Labor Standards Act (FLSA), “nonexempt” U.S. employees must be paid at least the federal minimum wage and one-and-one-half times their regular rate of pay for any hours they work over 40 in a workweek. Your business is not required to pay overtime to “exempt employees.”
The DOL, which administers and enforces the FLSA, provides specific criteria that must be met before an employee may be classified as exempt and ineligible for overtime pay. FLSA “white-collar” exemptions cover workers employed as executive, administrative, outside sales, and professional employees, as well as certain computer employees. Be careful, though. Job titles alone do not determine whether an employee is exempt.
Exempt executives must meet all of the following job tests:
To qualify for exemption under the administrative clause of the FLSA, employees must earn a salary of at least $455 per week and perform all of the following primary duties:
Exempt outside sales employees must meet all of the following tests:
To qualify for the computer employee exemption:
“Professional” work requires the consistent exercise of discretion and judgment, distinguishing it from positions involving routine mental, manual, mechanical, or physical labor. A professional employee generally uses advanced knowledge attained through education beyond high school to analyze, interpret or make deductions based on varying facts or circumstances.
There are two types of exempt professional employees: learned professionals and creative professionals.
To qualify for the learned professional exemption, employees must meet all of the following tests:
To qualify for the creative professional exemption, employees must meet every one of these tests:
Another category of white-collar exemptions is known as highly compensated employees, which comprises workers who regularly perform office or “non-manual” work and earn $100,000 or more annually. They are exempt and ineligible for overtime pay under the FLSA if they regularly perform at least one of the duties of an exempt executive, administrative or professional employee.
Misclassifying employees based solely on job titles can lead to costly compliance issues and erode employee trust. By understanding and applying the Fair Labor Standards Act (FLSA) criteria—beyond just titles—you safeguard your business from potential audits and penalties. At Axcet HR Solutions, we specialize in helping small and mid-sized businesses navigate complex wage and hour regulations. Our certified HR professionals can assist you in conducting accurate employee classifications and implementing compliant pay practices. Let us help you build a compliant, confident workplace.
For more information about how to classify employees who hold occupations or work in industries cited in FLSA regulations, visit the DOL’s Wage and Hour Division website.
Written by
Jeanette Coleman, SPHR, SHRM-SCP, is the Director of Human Resources at Axcet HR Solutions, where she has contributed her expertise for over 21 years.
As a leader in the HR industry, she holds advanced certifications as a Senior Professional in Human Resources (SPHR) and SHRM-Senior Certified Professional (SHRM-SCP). Jeanette oversees HR strategy and operations, ensuring Axcet delivers exceptional HR services that help small and mid-sized businesses stay compliant and grow.
With a Master’s degree in Human Resource Management from Keller Graduate School and a Bachelor of Science in Business Administration from Kansas State University, Jeanette is well-equipped to lead and support clients in navigating complex HR challenges.
Throughout her 15-year tenure as Director of Human Resources, she has been instrumental in positioning Axcet as the Midwest’s largest and premier Professional Employer Organization (PEO). Her previous roles at Axcet include Director of Employee Benefits and Senior HR Consultant, where she gained extensive experience in HR outsourcing, payroll administration, and employee risk management.
Jeanette’s leadership reflects her deep commitment to helping businesses thrive through strategic, compliance-driven HR solutions. Through her writing, she shares insights on HR strategy, compliance, and best practices to help employers confidently manage their workforce.
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