Executive, Administrative, and Professional Employees

Executive Exemption

The executive exemption applies to managerial employees who perform certain job duties and make a certain threshold salary. The minimum salary to qualify for the executive exemption is $455 per week or $23,660 per year (increasing to $913 per week or $47,476 per year in December 2016). Executive employees must also be paid on a "salary basis," which means that they receive the same amount in wages each pay period, regardless of the quality or quantity of their work.

To qualify for the executive exemption, all of the following requirements must also be met:

• The employee's primary duty must relate to managing the business or one of its recognized departments or subdivisions.
• The employee must customarily and regularly direct the work of at least two full-time employees (or their equivalent in part-time employees).
• The employee must have the authority to hire or fire employees, or the employee's recommendations as to hiring, firing, promotion, or demotion must carry particular weight.

Management duties include tasks such as interviewing, hiring, and training employees; setting employee's hours and wages; creating work schedules; directing the work of employees; giving feedback to employees as to performance; disciplining employees; dealing with employee complaints; planning and managing company budgets; and determining the types of materials or equipment to purchase.

Administrative Exemption

To qualify for the administrative exemption, an administrative employee must also earn at least $455 per week or $23,600 per year and be paid on a salary basis. In addition, the employee must meet both of the following requirements:

• The employee's primary duty must be performing office or other non-manual work which directly relates to the management or general business operations of the employer or its customers.
• The employee's primary duty must include the exercise of discretion and independent judgment with respect to significant matters.

An employee is engaged in administrative work if he or she performs tasks that keep the business running, such as those related to budgeting, accounting, and taxes; insurance; advertising and marketing; purchasing and procurement; quality control; human resources; public relations; and legal and regulatory compliance. Tasks that are central to creating the employer's product or selling the employer's services are not considered administrative work. For example, an executive assistant who manages the day-to-day of the company's CEO might qualify as an administrative employee, while a salesperson selling the company's products would not.

Professional Exemption

To qualify for the professional exemption, a professional employee must also earn at least $455 per week or $23,600 per year and be paid on a salary basis. In addition, the employee must qualify as either a "learned professional" or a "creative professional."

Learned Professional

The learned professional exemption applies to employees who have achieved a certain level of education or received a certain amount of professional training. These employees must meet all of the following requirements:

• The employee's primary duty must be intellectual work requiring advanced knowledge and the regular exercise of discretion and judgment.
• The advanced knowledge must be in a field of science or learning (such as law, medicine, accounting, engineering, architecture, teaching, science, or pharmacy).
• The advanced knowledge must be acquired by a prolonged course of specialized intellectual instruction (for example, by obtaining a certain academic degree or receiving similar intellectual training).

Examples of learned professionals include doctors, lawyers, pharmacists, dentists, engineers, and scientists.