The Fair Labor Standards Act (FLSA) requires employers to pay employees minimum wage for all hours worked and overtime at a rate of time and one-half the regular rate of pay when an employee works more than 40 hours in a workweek. However, there are certain exemptions from both the minimum wage and overtime requirements of the FLSA. These five “white collar” exemptions (executive, administrative, professional, computer professional and outside sales) are defined by the Department of Labor (DOL) in the Code of Federal Regulations Part 541. This series will discuss the highlights of each exemption.
Unlike the exemptions discussed previously, the professional exemption is challenging because of the types of positions that may qualify under this exemption.
In this category, there is the Learned Professional Exemption and the Creative Professional Exemption as well as Teachers and Doctors & Lawyers. Additionally, there are some exceptions under this exemption to the guaranteed weekly salary of $684. So, let’s break it down.
Learned Professionals:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
- The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
- The advanced knowledge must be in a field of science or learning; and
- The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
We’ll discuss the salaried basis regulations later in this article. However, throughout this discussion of the professional exemption, we will point out exceptions under this exemption to the salaried basis test.
“Work requiring advanced knowledge” means work that is predominantly intellectual in nature and which requires the use of discretion and judgment. Generally, a professional will use advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level.
Fields of science or learning includes law, medicine, theology, accounting, engineering, teaching, physical, chemical and biological sciences, pharmacy, etc. These are fields that have a recognized professional status and are distinguishable from the mechanical arts, skilled trades, etc.
Additionally, the learned professional is limited to professions where specialized academic training is a standard requirement for entrance into the profession…especially the requirement of having an appropriate academic degree. There can be some exceptions to this requirement when the individual has achieved the same knowledge level and perform substantially the same work as degreed employees but have obtained their knowledge through a combination of work experience and intellectual instruction. An example of this could be a chemist who does not possess a degree in chemistry.
Creative Professionals:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
- The 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.
According to the FLSA Fact Sheet
“Exemption as a creative professional depends on the extent of the invention, imagination, originality or talent exercised by the employee. Whether the exemption applies, therefore, must be determined on a case-by-case basis. The requirements are generally met by actors, musicians, composers, soloists, certain painters, writers, cartoonists, essayists, novelists, and others as set forth in the regulations. Journalists may satisfy the duties requirements for the creative professional exemption if their primary duty is work requiring invention, imagination, originality or talent. Journalists are not exempt creative professionals if they only collect, organize and record information that is routine or already public, or if they do not contribute a unique interpretation or analysis to a news product.”
Further, the work must be performed in a recognized field of artistic or creative endeavor such as music, writing, graphic arts or acting.
The FLSA Fact Sheet goes on to state that “teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment. The salary and salary basis requirements do not apply to bona fide teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge includes, by its very nature, exercising discretion and judgment.”
Additionally, those practicing law or medicine are exempt if they hold a valid license or certificate allowing them to practice law or medicine and are actually engaged in such a practice. The salary basis test does not apply to bona fide practitioners of law or medicine.
More information about the FLSA’s professional exemption can be found in the DOL’s Fact Sheet at http://www.dol.gov/whd/overtime/fs17d_professional.pdf.
Please note that individual states may have different minimum salary standards. Check out ADP’s article on Exempt Employees: Minimum Salary Requirements for 2022.
You can also view our latest micro-learning sessions…Make This Job Exempt! and I Have to Pay Employees for That?!
EAF members can also access our White-Collar Exemption Advisor interactive tool in our CCH HR Compliance Library.
EAF responds to hundreds of hotline calls and emails monthly. We would be happy to answer any interesting questions you may have too! Contacts us at [email protected] or 407.260.6556
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