NOTICE: On August 30, 2023, the Department of Labor (Department) announced issuance of a Notice of Proposed Rulemaking (NPRM), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The NPRM proposes to update and revise the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees. Proposed revisions include increasing the standard salary level and the highly compensated employee total annual compensation threshold, as well as providing an automatic updating mechanism that would allow for the timely and efficient updating of all the thresholds to reflect current earnings data.

Comparing the Tests for Executive Employees
 

Short Test Before 08/23/2004

Standard Test Effective
08/23/2004

Salary Level

$250 per week

$455 * per week

Duties

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

Includes the customary and regular direction of the work of two or more other employees therein.

 

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

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

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.

 
Comparing the Tests for Administrative Employees
 

Short Test Before 08/23/2004

Standard Test Effective
08/23/2004

Salary Level

$250 per week

$455 * per week

Duties

Whose primary duty consists of the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers; and

Which includes work requiring the exercise of discretion and independent judgment.

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

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

 
Comparing the Tests for Professional Employees
 

Short Test Before 08/23/2004

Standard Test Effective
08/23/2004

Salary Level

$250 per week

$455 * per week

Duties

Whose primary duty consists of the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study; and

Which includes work requiring the consistent exercise of discretion and judgment; or

Whose primary duty consists of the performance of work requiring invention, imagination, or talent in a recognized field of artistic endeavor.

Whose primary duty is the performance of work requiring knowledge of an advanced type (defined as work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment) in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or

Whose primary duty is the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

 

 
Comparing the Tests for Computer Employees
 

Short Test Before 08/23/2004

Standard Test Effective
08/23/2004

Salary Level

$250 per week or, if paid hourly,
6 ½ x $4.25 (i.e., $27.63 an hour)

$455 * per week or $27.63 an hour

Duties

Primary duty of performing work that requires theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering, and employed and engaged in these activities as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field, as provided in § 541.303 , which includes work requiring the consistent exercise of discretion and judgment.

§ 541.303(b) : Whose primary duty consists of one or more of the following:
(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.

Computer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field are eligible for exemption, but only if the employee’s 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.

 
Comparing the Tests for Outside Sales Employees
 

Short Test Before 08/23/2004

Standard Test Effective
08/23/2004

Salary Level

No minimum salary required

No minimum salary required

Duties

Who is employed for the purpose of and who is customarily and regularly engaged away from the employer’s place or places of business in making sales; or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

Who does not devote more than 20 percent of the hours worked in the workweek by nonexempt employees of the employer to activities that are not incidental to and in conjunction with the employee’s own outside sales or solicitations.

 

 

Whose primary duty is making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

Who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty.

 

 

Note (added January 2018): *

The Department of Labor is undertaking rulemaking to revise the regulations located at 29 C.F.R. part 541, which govern the exemption of executive, administrative, and professional employees from the Fair Labor Standards Act's minimum wage and overtime pay requirements. Until the Department issues its final rule, it will enforce the part 541 regulations in effect on November 30, 2016, including the $455 per week standard salary level. These regulations are available at: https://www.dol.gov/whd/overtime/regulations.pdf .