Exempt Classification: The Duties Tests

To be classified as exempt, an employee must earn at least $35,568/year AND pass one of the five duties tests below. Both conditions are required.

The salary basis rule

Exempt employees must be paid a predetermined salary that is not subject to reduction based on the quality or quantity of work. If your employer can dock your pay for working fewer hours in a week, you may not be truly exempt.

1. Executive Exemption

$35,568/year minimum

  • +Primary duty is managing the enterprise or a recognized department
  • +Customarily and regularly directs the work of two or more full-time employees
  • +Has authority to hire, fire, or promote (or recommendations given significant weight)
Watch out: A manager in title who cannot actually hire/fire without approval from above may not qualify.

2. Administrative Exemption

$35,568/year minimum

  • +Primary duty is office/non-manual work directly related to management or general business operations
  • +Exercises discretion and independent judgment with respect to matters of significance
  • +Not merely executing routine decisions set by others
Watch out: This is frequently misapplied. Clerical staff, data entry workers, and customer service agents performing routine work typically do not qualify.

3. Professional Exemption

$35,568/year minimum

  • +Primary duty is work requiring advanced knowledge in a field of science or learning
  • +Advanced knowledge customarily acquired by a prolonged course of specialized intellectual instruction (typically a degree)
  • +Includes lawyers, doctors, engineers, teachers, accountants (CPAs), architects
Watch out: The learned professional exemption requires a genuine advanced degree for the role - not just having one.

4. Computer Employee Exemption

$35,568/year OR $27.63/hour minimum

  • +Systems analyst, programmer, software engineer, or similar computer worker
  • +Primary duty involves application of systems analysis techniques and procedures
  • +Or design/development/documentation of computer systems or programs
  • +Or highly skilled work in testing/debugging/modifying computer programs
Watch out: IT support staff, help desk workers, and most data entry roles do not meet this test.

5. Outside Sales Exemption

No minimum salary required

  • +Primary duty is making sales or obtaining orders/contracts
  • +Customarily and regularly engaged away from the employer's place of business
Watch out: Inside sales staff who work from a call center or office are non-exempt regardless of their pay structure.