When is a Non-Sales Employee Exempt from Overtime?

            The Fair Labor Standards Act (“FLSA”) is a Federal law that requires employees be paid overtime for all hours worked in excess of 40 in a workweek. The FLSA also establishes three narrow “exemptions” from the overtime rule. Certain employees paid on a salary basis may be exempt from overtime, if the majority of tasks they perform in each workweek are properly classified as: “professional,” “executive,” or “administrative.”[1]  Each of these exemptions requires that an employee be compensated at a weekly rate of not less than $455.00 per week for work performed prior to January 1, 2020, and not less than $684.00 per week for work performed thereafter.[2]

            In addition, certain sales employees may be exempt from the overtime provisions of the FLSA if they are subject to the “retail service establishment exemption”[3] or the “outside sales exemption.”[4] These exemptions are discussed at: When is a Sales Employee Exempt from Overtime?

            There are other, limited circumstances in which an employee may be exempt from the overtime requirements of the FLSA. If you believe you may be misclassified as an overtime exempt, salaried employee, we encourage you to Contact Us to meet with an attorney and discuss your situation.


The Professional Exemption

            The professional exemption applies only to employees such as licensed accountants, engineers, attorneys, doctors, or others who perform work that is traditionally regarded as part of a recognized professional occupation, and which customarily requires the employee to complete a “prolonged course of specialized intellectual instruction” or which requires “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.”[5] Additionally, the employee must be compensated at a weekly rate of not less than $455.00 per week for work performed prior to January 1, 2020, and not less than $684.00 per week for work performed thereafter.[6]

The Executive Exemption

            The executive exemption is limited to workers who are engaged in the management of an enterprise or subdivision thereof, supervise two or more other full-time employees, and have the authority to hire or fire other employees.[7] Additionally, the employee must be compensated at a weekly rate of not less than $455.00 per week for work performed prior to January 1, 2020, and not less than $684.00 per week for work performed thereafter.[8]

The Administrative Exemption

            The administrative exemption by its plain terms cannot apply to workers who are involved in the “production side” of a business enterprise, such as workers whose primary role is to assist the company in carrying out the activities for which it is hired by customers (as opposed to ancillary administrative roles such as accounting, human resources, database management, etc.).  Where a worker is involved in production work, they are, per se, a production worker, and not subject to the administrative exemption.

            Even if the nature of an employee’s job duties generally meet the requirements of the administrative exemption, the employee must “regularly and customarily” be engaged in work that requires the exercise of discretion and independent judgment.[9]  Federal regulations explain that “discretion and independent judgment involves the comparison and evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered,” and requires “more than the use of skill in applying well-established techniques, procedures or specific standards in manuals or other sources.”[10]  The term “‘matters of significance’ refers to the level of importance or consequence of the work performed.”[11]  Additionally, the employee must be compensated at a weekly rate of not less than $455.00 per week for work performed prior to January 1, 2020, and not less than $684.00 per week for work performed thereafter.[12]

The Burden of Proof

            It is important to note that any claim of exemption from the overtime requirements of the FLSA is an affirmative defense, and the burden of proof rests with the employer.  Furthermore, it is an enhanced burden of proof, requiring the employer to demonstrate that a particular employee falls “clearly and unmistakably” within the confines of one or more exemptions. [13] Close calls are thus resolved in favor of the employee.


            The protections of the FLSA are designed to ensure that you receive the full value of the work you perform on behalf of your employer. Determining whether you are subject to one of the exemptions to FLSA overtime requirements requires careful, individualized inquiry. If you believe you may be misclassified as an overtime exempt, salaried employee, we encourage you to Contact Us to meet with an attorney and discuss your situation.


[1] 29 U.S.C. § 213(a)(1).
[2] Although the Department of Labor issued a final rule in 2016 increasing the minimum salary basis to a weekly rate of not less than the 40th percentile of weekly earnings of full-time non hourly workers in the lowest-wage Census Region, or $913.00 per week, 29 C.F.R. § 541.600(a), that regulation was struck down in the matter of Nevada v. U.S. Dep’t of Labor, 218 F. Supp. 3d 520 (E.D. Tex. 2016), and cannot be enforced.
[3] 29 U.S.C. § 207(i).
[4] 29 U.S.C. § 213(a)(1).
[5] 29 C.F.R. § 541.300.
[6] See fn. 2, supra.
[7] 29 C.F.R. § 541.100.
[8] See fn. 2, supra.
[9] 29 C.F.R. § 541.200(a)(3).
[10] 29 C.F.R. § 541.202(a) and (e).
[11] 29 C.F.R. § 541.202(a).
[12] See fn. 2, supra.
[13] See, e.g., Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S. Ct. 453, 456 (1960); see also, Alvarez v. IBP, Inc., 339 F.3d 894, 905 (9th Cir. 2003).

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