252 
•HRES 1516 IH 
the statutory minimum, a shorter workweek than the stat-
utory maximum, or a higher overtime premium (double 
time, for example) than provided by the Act. While collec-
tive bargaining agreements cannot waive or reduce the 
Act’s protections, nothing in the Act or the regulations 
in this part relieves employers from their contractual obli-
gations under collective bargaining agreements. 
‘‘Subpart B—Executive Employees (§§541.100-541.106) 
‘‘§ 541.100 General rule for executive employees 
‘‘(a) The term ‘employee employed in a bona fide ex-
ecutive capacity’ in section 13(a)(1) of the Act shall mean 
any employee: 
‘‘(1) Compensated on a salary basis pursuant to 
§541.600 at a rate of not less than $684 per week 
ø(or $455 per week if employed in the Common-
wealth of the Northern Mariana Islands, Guam, 
Puerto Rico, or the U.S. Virgin Islands by employ-
ers other than the Federal government, or $380 per 
week if employed in American Samoa by employers 
other than the Federal government)¿, exclusive of 
board, lodging or other facilities; 
‘‘(2) Whose primary duty is management of the 
øenterprise¿ <<employing office>> in which the 
employee is employed or of a customarily recognized 
department or subdivision thereof; 
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‘‘(3) Who customarily and regularly directs the 
work of two or more other employees; and 
‘‘(4) Who has the authority to hire or fire other 
employees or whose suggestions and recommenda-
tions as to the hiring, firing, advancement, pro-
motion or any other change of status of other em-
ployees are given particular weight. 
‘‘(b) The phrase ‘salary basis’ is defined at §541.602; 
‘board, lodging or other facilities’ is defined at §541.606; 
‘primary duty’ is defined at §541.700; and ‘customarily 
and regularly’ is defined at §541.701. 
ø‘‘§ 541.101 Business owner 
‘‘The term ‘employee employed in a bona fide execu-
tive capacity’ in section 13(a)(1) of the Act also includes 
any employee who owns at least a bona fide 20-percent 
equity interest in the enterprise in which the employee is 
employed, regardless of whether the business is a cor-
porate or other type of organization, and who is actively 
engaged in its management. The term ‘management’ is de-
fined in §541.102. The requirements of Subpart G (salary 
requirements) of this part do not apply to the business 
owners described in this section.¿ 
‘‘§ 541.102 Management 
‘‘Generally, ‘management’ includes, but is not limited 
to, activities such as interviewing, selecting, and training 
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•HRES 1516 IH 
of employees; setting and adjusting their rates of pay and 
hours of work; directing the work of employees; maintain-
ing production or sales records for use in supervision or 
control; appraising employees’ productivity and efficiency 
for the purpose of recommending promotions or other 
changes in status; handling employee complaints and 
grievances; disciplining employees; planning the work; de-
termining the techniques to be used; apportioning the 
work among the employees; determining the type of mate-
rials, supplies, machinery, equipment or tools to be used 
or merchandise to be bought, stocked and sold; controlling 
the flow and distribution of materials or merchandise and 
supplies; providing for the safety and security of the em-
ployees or the property; planning and controlling the budg-
et; and monitoring or implementing legal compliance 
measures. 
‘‘§ 541.103 Department or subdivision 
‘‘(a) The phrase ‘a customarily recognized depart-
ment or subdivision’ is intended to distinguish between a 
mere collection of employees assigned from time to time 
to a specific job or series of jobs and a unit with perma-
nent status and function. A customarily recognized de-
partment or subdivision must have a permanent status 
and a continuing function. For example, a large employ-
er’s human resources department might have subdivisions 
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•HRES 1516 IH 
for labor relations, pensions and other benefits, equal em-
ployment opportunity, and personnel management, each of 
which has a permanent status and function. 
‘‘(b) When an øenterprise¿ <<employing office>> 
has more than one øestablishment¿ <<location>>, the 
employee 
in 
charge 
of 
each 
øestablishment¿ 
<<location>> may be considered in charge of a recog-
nized subdivision of the øenterprise¿ <<employing 
office>>. 
‘‘(c) A recognized department or subdivision need not 
be physically within the employer’s establishment and may 
move from place to place. The mere fact that the employee 
works in more than one location does not invalidate the 
exemption if other factors show that the employee is actu-
ally in charge of a recognized unit with a continuing func-
tion in the organization. 
‘‘(d) Continuity of the same subordinate personnel is 
not essential to the existence of a recognized unit with a 
continuing function. An otherwise exempt employee will 
not lose the exemption merely because the employee draws 
and supervises workers from a pool or supervises a team 
of workers drawn from other recognized units, if other fac-
tors are present that indicate that the employee is in 
charge of a recognized unit with a continuing function. 
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‘‘§ 541.104 Two or more other employees 
‘‘(a) To qualify as an exempt executive under 
§541.100, the employee must customarily and regularly 
direct the work of two or more other employees. The 
phrase ‘two or more other employees’ means two full-time 
employees or their equivalent. One full-time and two half- 
time employees, for example, are equivalent to two full- 
time employees. Four half-time employees are also equiva-
lent. 
‘‘(b) The supervision can be distributed among two, 
three or more employees, but each such employee must 
customarily and regularly direct the work of two or more 
other full-time employees or the equivalent. Thus, for ex-
ample, a department with five full-time nonexempt work-
ers may have up to two exempt supervisors if each such 
supervisor customarily and regularly directs the work of 
two of those workers. 
‘‘(c) An employee who merely assists the manager of 
a particular department and supervises two or more em-
ployees only in the actual manager’s absence does not 
meet this requirement. 
‘‘(d) Hours worked by an employee cannot be credited 
more than once for different executives. Thus, a shared 
responsibility for the supervision of the same two employ-
ees in the same department does not satisfy this require-
ment. However, a full-time employee who works four hours 
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•HRES 1516 IH 
for one supervisor and four hours for a different super-
visor, for example, can be credited as a half-time employee 
for both supervisors. 
‘‘§ 541.105 Particular weight 
‘‘To determine whether an employee’s suggestions 
and recommendations are given ‘particular weight,’ factors 
to be considered include, but are not limited to, whether 
it is part of the employee’s job duties to make such sugges-
tions and recommendations; the frequency with which 
such suggestions and recommendations are made or re-
quested; and the frequency with which the employee’s sug-
gestions and recommendations are relied upon. Generally, 
an executive’s suggestions and recommendations must 
pertain to employees whom the executive customarily and 
regularly directs. It does not include an occasional sugges-
tion with regard to the change in status of a co-worker. 
An employee’s suggestions and recommendations may still 
be deemed to have ‘particular weight’ even if a higher level 
manager’s recommendation has more importance and even 
if the employee does not have authority to make the ulti-
mate decision as to the employee’s change in status. 
‘‘§ 541.106 Concurrent duties 
‘‘(a) Concurrent performance of exempt and non-
exempt work does not disqualify an employee from the ex-
ecutive exemption if the requirements of §541.100 are oth-
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•HRES 1516 IH 
erwise met. Whether an employee meets the requirements 
of §541.100 when the employee performs concurrent du-
ties is determined on a case-by-case basis and based on 
the factors set forth in §541.700. Generally, exempt ex-
ecutives make the decision regarding when to perform 
nonexempt duties and remain responsible for the success 
or failure of business operations under their management 
while performing the nonexempt work. In contrast, the 
nonexempt employee generally is directed by a supervisor 
to perform the exempt work or performs the exempt work 
for defined time periods. An employee whose primary duty 
is ordinary production work or routine, recurrent or repet-
itive tasks cannot qualify for exemption as an executive. 
‘‘(b) For example, an assistant manager in a retail 
establishment may perform work such as serving cus-
tomers, cooking food, stocking shelves and cleaning the es-
tablishment, but performance of such nonexempt work 
does not preclude the exemption if the assistant manager’s 
primary duty is management. An assistant manager can 
supervise employees and serve customers at the same time 
without losing the exemption. An exempt employee can 
also simultaneously direct the work of other employees and 
stock shelves. 
‘‘(c) In contrast, a relief supervisor or working super-
visor whose primary duty is performing nonexempt work 
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•HRES 1516 IH 
on the production line in a manufacturing plant does not 
become exempt merely because the nonexempt production 
line employee occasionally has some responsibility for di-
recting the work of other nonexempt production line em-
ployees when, for example, the exempt supervisor is un-
available. Similarly, an employee whose primary duty is 
to work as an electrician is not an exempt executive even 
if the employee also directs the work of other employees 
on the job site, orders parts and materials for the job, 
and handles requests from the prime contractor. 
‘‘Subpart C—Administrative Employees (§§541.200- 
541.204) 
‘‘§ 541.200 General rule for administrative employees 
‘‘(a) The term ‘employee employed in a bona fide ad-
ministrative capacity’ in section 13(a)(1) of the Act shall 
mean any employee: 
‘‘(1) Compensated on a salary or fee basis pur-
suant to §541.600 at a rate of not less than $684 
per week ø(or $455 per week if employed in the 
Commonwealth of the Northern Mariana Islands, 
Guam, Puerto Rico, or the U.S. Virgin Islands by 
employers other than the Federal government, or 
$380 per week if employed in American Samoa by 
employers other than the Federal government)¿, ex-
clusive of board, lodging or other facilities; 
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‘‘(2) 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<<, constitu-
ents or stakeholders>>; and 
‘‘(3) Whose primary duty includes the exercise 
of discretion and independent judgment with respect 
to matters of significance. 
‘‘(b) The term ‘salary basis’ is defined at §541.602; 
‘fee basis’ is defined at §541.605; ‘board, lodging or other 
facilities’ is defined at §541.606; and ‘primary duty’ is de-
fined at §541.700. 
‘‘§ 541.201 Directly related to management or general 
business operations 
‘‘(a) To qualify for the administrative exemption, an 
employee’s primary duty must be the performance of work 
directly related to the management or general business op-
erations of the employer or the employer’s customers<<, 
constituents or stakeholders>>. The phrase ‘directly re-
lated to the management or general business operations’ 
refers to the type of work performed by the employee. To 
meet this requirement, an employee must perform work 
directly related to assisting with the running or servicing 
of the [business] <<employing office>>, as distin-
guished, for example, from working on a manufacturing 
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•HRES 1516 IH 
production line or selling a product in a retail or service 
establishment. 
‘‘(b) Work directly related to management or general 
business operations includes, but is not limited to, work 
in functional areas such as tax; finance; accounting; budg-
eting; auditing; insurance; quality control; purchasing; 
procurement; advertising; marketing; research; safety and 
health; personnel management; human resources; em-
ployee benefits; labor relations; public relations, govern-
ment relations; computer network, internet and database 
administration; legal and regulatory compliance; and simi-
lar activities. Some of these activities may be performed 
by employees who also would qualify for another exemp-
tion. 
‘‘(c) An employee may qualify for the administrative 
exemption if the employee’s primary duty is the perform-
ance of work directly related to the management or gen-
eral business operations of the employer’s customers<<, 
constituents and/or stakeholders>>. Thus, for example, 
employees acting as advisers or consultants to their em-
ployer’s øclients or¿ customer<<, constituents or 
stakeholders>> (as tax experts or financial consultants, 
for example) may be exempt. 
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•HRES 1516 IH 
‘‘§ 541.202 Discretion and independent judgment 
‘‘(a) To qualify for the administrative exemption, an 
employee’s primary duty must include the exercise of dis-
cretion and independent judgment with respect to matters 
of significance. In general, the exercise of discretion and 
independent judgment involves the comparison and the 
evaluation of possible courses of conduct, and acting or 
making a decision after the various possibilities have been 
considered. The term ‘matters of significance’ refers to the 
level of importance or consequence of the work performed. 
‘‘(b) The phrase ‘discretion and independent judg-
ment’ must be applied in the light of all the facts involved 
in the particular employment situation in which the ques-
tion arises. Factors to consider when determining whether 
an employee exercises discretion and independent judg-
ment with respect to matters of significance include, but 
are not limited to: whether the employee has authority to 
formulate, affect, interpret, or implement management 
policies or operating practices; whether the employee car-
ries out major assignments in conducting the operations 
of the øbusiness¿ <<employing office>>; whether the 
employee performs work that affects business operations 
<<of the employing office>>to a substantial degree, 
even if the employee’s assignments are related to operation 
of a particular segment of the øbusiness¿ <<employing 
office>>; whether the employee has authority to commit 
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•HRES 1516 IH 
the employer in matters that have significant financial im-
pact; whether the employee has authority to waive or devi-
ate from established policies and procedures without prior 
approval; whether the employee has authority to negotiate 
and bind the øcompany¿<<employing office>> on sig-
nificant matters; whether the employee provides consulta-
tion or expert advice to management; whether the em-
ployee is involved in planning longer short-term øbusi-
ness¿ <<employing office>> objectives; whether the em-
ployee investigates and resolves matters of significance on 
behalf of management; and whether the employee rep-
resents the øcompany¿<<employing office>> in han-
dling complaints, arbitrating disputes or resolving griev-
ances. 
‘‘(c) The exercise of discretion and independent judg-
ment implies that the employee has authority to make an 
independent choice, free from immediate direction or su-
pervision. However, employees can exercise discretion and 
independent judgment even if their decisions or rec-
ommendations are reviewed at a higher level. Thus, the 
term ‘discretion and independent judgment’ does not re-
quire that the decisions made by an employee have a final-
ity that goes with unlimited authority and a complete ab-
sence of review. The decisions made as a result of the exer-
cise of discretion and independent judgment may consist 
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•HRES 1516 IH 
of recommendations for action rather than the actual tak-
ing of action. The fact that an employee’s decision may 
be subject to review and that upon occasion the decisions 
are revised or reversed after review does not mean that 
the employee is not exercising discretion and independent 
judgment. For example, the policies formulated by the 
øcredit¿ 
manager 
of 
a<<n>> 
ølarge 
corpora-
tion¿<<employing office>> may be subject to review by 
higher øcompany¿<<employing office>> officials who 
may approve or disapprove these policies. The ømanage-
ment consultant¿ <<department director>> who has 
made a study of the operations of a øbusiness¿ 
<<department>> and who has drawn a proposed change 
in organization may have the plan reviewed or revised by 
superiors 
before 
it 
is 
øsubmitted 
to 
the 
cli-
ent¿<<approved>>. 
‘‘(d) 
An 
employer’s 
volume 
of 
øbusiness¿ 
<<work>> may make it necessary to employ a number 
of employees to perform the same or similar work. The 
fact that many employees perform identical work or work 
of the same relative importance does not mean that the 
work of each such employee does not involve the exercise 
of discretion and independent judgment with respect to 
matters of significance. 
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‘‘(e) The exercise of discretion and independent judg-
ment must be more than the use of skill in applying well- 
established techniques, procedures or specific standards 
described in manuals or other sources. See also §541.704 
regarding use of manuals. The exercise of discretion and 
independent judgment also does not include clerical or sec-
retarial work, recording or tabulating data, or performing 
other mechanical, repetitive, recurrent or routine work. An 
employee who simply tabulates data is not exempt, even 
if labeled as a ‘statistician.’ 
‘‘(f) An employee does not exercise discretion and 
independent judgment with respect to matters of signifi-
cance merely because the employer will experience finan-
cial losses if the employee fails to perform the job properly. 
For example, a messenger who is entrusted with carrying 
large sums of money does not exercise discretion and inde-
pendent judgment with respect to matters of significance 
even though serious consequences may flow from the em-
ployee’s neglect. Similarly, an employee who operates very 
expensive equipment does not exercise discretion and inde-
pendent judgment with respect to matters of significance 
merely because improper performance of the employee’s 
duties may cause serious financial loss to the employer. 
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•HRES 1516 IH 
‘‘§ 541.203 Administrative exemption examples 
‘‘(a) øInsurance claims adjusters¿<<Employees who 
investigate claims>> generally meet the duties require-
ments for the administrative exemptionø, whether they 
work for an insurance company or other type of com-
pany,¿ if their duties include activities such as inter-
viewing øinsureds,¿ witnesses øand physicians¿; inspect-
ing property damage; reviewing factual information to pre-
pare damage estimates; evaluating and making rec-
ommendations regarding coverage of claims; determining 
liability and total value of a claim; negotiating settlements; 
and making recommendations regarding litigation. 
‘‘(b) Employees in øthe¿ financial services øindus-
try¿ generally meet the duties requirements for the admin-
istrative exemption if their duties include work such as 
collecting and analyzing information regarding the cus-
tomer’s income, assets, investments or debts; determining 
which financial products best meet the customer’s needs 
and financial circumstances; advising the customer re-
garding the advantages and disadvantages of different fi-
nancial products; and marketing, servicing or promoting 
the employer’s financial products. However, an employee 
whose primary duty is selling financial products does not 
qualify for the administrative exemption. 
‘‘(c) An employee who leads a team of other employ-
ees assigned to complete major projects for the employer 
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•HRES 1516 IH 
(such as øpurchasing, selling or closing all or part of the 
business,¿ negotiating a real estate transaction or a collec-
tive bargaining agreement, or designing and implementing 
productivity improvements) generally meets the duties re-
quirements for the administrative exemption, even if the 
employee does not have direct supervisory responsibility 
over the other employees on the team. 
‘‘(d) An executive assistant or administrative assist-
ant to a øbusiness owner or senior executive of a large 
business¿<<senior management official of an employing 
office>> generally meets the duties requirements for the 
administrative exemption if such employee, without spe-
cific instructions or prescribed procedures, has been dele-
gated authority regarding matters of significance. 
‘‘(e) Human resources managers who formulate, in-
terpret or implement employment policies and manage-
ment consultants who study the operations of a øbusi-
ness¿ <<employing office>> and propose changes in or-
ganization generally meet the duties requirements for the 
administrative exemption. However, personnel clerks who 
‘screen’ applicants to obtain data regarding their min-
imum qualifications and fitness for employment generally 
do not meet the duties requirements for the administrative 
exemption. Such personnel clerks typically will reject all 
applicants who do not meet minimum standards for the 
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•HRES 1516 IH 
particular job or for employment by the øcompany¿ 
<<employing office>>. The minimum standards are 
usually set by the exempt human resources manager or 
other øcompany¿ <<employing office>> officials, and 
the decision to hire from the group of qualified applicants 
who do meet the minimum standards is similarly made 
by the exempt human resources manager or other øcom-
pany¿ <<employing office>> officials. Thus, when the 
interviewing and screening functions are performed by the 
human resources manager or personnel manager who 
makes the hiring decision or makes recommendations for 
hiring from the pool of qualified applicants, such duties 
constitute exempt work, even though routine, because this 
work is directly and closely related to the employee’s ex-
empt functions. 
‘‘(f) Purchasing agents with authority to bind the 
øcompany¿ <<employing office>> on significant pur-
chases generally meet the duties requirements for the ad-
ministrative exemption even if they must consult with top 
management officials when making a purchase commit-
ment for øraw¿ materials in excess of the contemplated 
øplant¿ needs. 
‘‘(g) Ordinary inspection work generally does not 
meet the duties requirements for the administrative ex-
emption. Inspectors normally perform specialized work 
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•HRES 1516 IH 
along standardized lines involving well-established tech-
niques and procedures which may have been catalogued 
and described in manuals or other sources. Such inspec-
tors rely on techniques and skills acquired by special train-
ing or experience. They have some leeway in the perform-
ance of their work but only within closely prescribed limits. 
‘‘(h) Employees usually called examiners or graders, 
such as employees that grade lumber, generally do not 
meet the duties requirements for the administrative ex-
emption. Such employees usually perform work involving 
the comparison of products with established standards 
which are frequently catalogued. Often, after continued 
reference to the written standards, or through experience, 
the employee acquires sufficient knowledge so that ref-
erence to written standards is unnecessary. The substi-
tution of the employee’s memory for a manual of stand-
ards does not convert the character of the work performed 
to exempt work requiring the exercise of discretion and 
independent judgment. 
‘‘(i) øComparison shopping performed by an em-
ployee of a retail store who merely reports to the buyer 
the prices at a competitor’s store does not qualify for the 
administrative exemption. However, the buyer who evalu-
ates such reports on competitor prices to set the employ-
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•HRES 1516 IH 
er’s prices generally meets the duties requirements for the 
administrative exemption.¿<<Reserved.>> 
‘‘(j) øPublic sector i¿<<I>>nspectors or investiga-
tors of various types, such as fire prevention or safety, 
building or construction, health or sanitation, environ-
mental or soils specialists and similar employees, generally 
do not meet the duties requirements for the administrative 
exemption because their work typically does not involve 
work directly related to the management or general busi-
ness operations of the employer. Such employees also do 
not qualify for the administrative exemption because their 
work involves the use of skills and technical abilities in 
gathering factual information, applying known standards 
or prescribed procedures, determining which procedure to 
follow, or determining whether prescribed standards or 
criteria are met. 
‘‘§ 541.204 Educational establishments 
‘‘(a) The term ‘employee employed in a bona fide ad-
ministrative capacity’ in section 13(a)(1) of the Act also 
includes employees: 
‘‘(1) Compensated on a salary or fee basis at a 
rate of not less than $684 per week ø(or $455 per 
week if employed in the Commonwealth of the 
Northern Mariana Islands, Guam, Puerto Rico, or 
the U.S. Virgin Islands by employers other than the 
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Federal government, or $380 per week if employed 
in American Samoa by employers other than the 
Federal government)¿, exclusive of board, lodging, 
or other facilities; or on a salary basis which is at 
least equal to the entrance salary for teachers in the 
educational establishment by which employed; and 
‘‘(2) Whose primary duty is performing admin-
istrative functions directly related to academic in-
struction or training in an educational establishment 
or department or subdivision thereof. 
‘‘(b) The term ‘educational establishment’ means an 
elementary or secondary school system, an institution of 
higher education or other educational institution. Sections 
3(v) and 3(w) of the Act define elementary and secondary 
schools as those day or residential schools that provide ele-
mentary or secondary education, as determined under 
State law. Under the laws of most States, such education 
includes the curriculums in grades 1 through 12; under 
many it includes also the introductory programs in kinder-
garten. Such education in some States may also include 
nursery school programs in elementary education and jun-
ior college curriculums in secondary education. The term 
‘other educational establishment’ includes special schools 
for mentally or physically disabled or gifted children, re-
gardless of any classification of such schools as elemen-
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tary, secondary or higher. Factors relevant in determining 
whether post-secondary career programs are educational 
institutions include whether the school is licensed by a 
state agency responsible for the state’s educational system 
or accredited by a nationally recognized accrediting orga-
nization for career schools. Also, for purposes of the ex-
emption, no distinction is drawn between public and pri-
vate schools, or between those operated for profit and 
those that are not for profit. 
‘‘(c) The phrase ‘performing administrative functions 
directly related to academic instruction or training’ means 
work related to the academic operations and functions in 
a school rather than to administration along the lines of 
general business operations. Such academic administrative 
functions include operations directly in the field of edu-
cation. Jobs relating to areas outside the educational field 
are not within the definition of academic administration. 
‘‘(1) Employees engaged in academic adminis-
trative functions include: the superintendent or other 
head of an elementary or secondary school system, 
and any assistants, responsible for administration of 
such matters as curriculum, quality and methods of 
instructing, measuring and testing the learning po-
tential and achievement of students, establishing and 
maintaining academic and grading standards, and 
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other aspects of the teaching program; the principal 
and any vice-principals responsible for the operation 
of an elementary or secondary school; department 
heads in institutions of higher education responsible 
for the administration of the mathematics depart-
ment, the English department, the foreign language 
department, etc.; academic counselors who perform 
work such as administering school testing programs, 
assisting students with academic problems and ad-
vising students concerning degree requirements; and 
other employees with similar responsibilities. 
‘‘(2) Jobs relating to building management and 
maintenance, jobs relating to the health of the stu-
dents, and academic staff such as social workers, 
psychologists, lunch room managers or dietitians do 
not perform academic administrative functions. Al-
though such work is not considered academic admin-
istration, such employees may qualify for exemption 
under §541.200 or under other sections of this part, 
provided the requirements for such exemptions are 
met. 
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‘‘Subpart D—Professional Employees (§§541.300- 
541.304) 
‘‘§ 541.300 General rule for professional employees 
‘‘(a) The term ‘employee employed in a bona fide pro-
fessional capacity’ in section 13(a)(1) of the Act shall 
mean any employee: 
‘‘(1) Compensated on a salary or fee basis pur-
suant to §541.600 at a rate of not less than $684 
per week ø(or $455 per week if employed in the 
Commonwealth of the Northern Mariana Islands, 
Guam, Puerto Rico, or the U.S. Virgin Islands by 
employers other than the Federal government, or 
$380 per week if employed in American Samoa by 
employers other than the Federal government)¿, ex-
clusive of board, lodging or other facilities; and 
‘‘(2) Whose primary duty is the performance of 
work: 
‘‘(i) Requiring knowledge of an advanced 
type in a field of science or learning customarily 
acquired by a prolonged course of specialized 
intellectual instruction; or 
‘‘(ii) Requiring invention, imagination, 
originality or talent in a recognized field of ar-
tistic or creative endeavor. 
‘‘(b) The term ‘salary basis’ is defined at §541.602; 
‘fee basis’ is defined at §541.605; ‘board, lodging or other 
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facilities’ is defined at §541.606; and ‘primary duty’ is de-
fined at §541.700. 
‘‘§ 541.301 Learned professionals 
‘‘(a) To qualify for the learned professional exemp-
tion, an employee’s primary duty must be the performance 
of work requiring advanced knowledge in a field of science 
or learning customarily acquired by a prolonged course of 
specialized intellectual instruction. This primary duty test 
includes three elements: 
‘‘(1) The employee must perform work requir-
ing advanced knowledge; 
‘‘(2) The advanced knowledge must be in a field 
of science or learning; and 
‘‘(3) The advanced knowledge must be custom-
arily acquired by a prolonged course of specialized 
intellectual instruction. 
‘‘(b) The phrase ‘work requiring advanced knowledge’ 
means work which is predominantly intellectual in char-
acter, and which includes work requiring the consistent 
exercise of discretion and judgment, as distinguished from 
performance of routine mental, manual, mechanical or 
physical work. An employee who performs work requiring 
advanced knowledge generally uses the advanced knowl-
edge to analyze, interpret or make deductions from vary-
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ing facts or circumstances. Advanced knowledge cannot be 
attained at the high school level. 
‘‘(c) The phrase ‘field of science or learning’ includes 
the traditional professions of law, medicine, theology, ac-
counting, actuarial computation, engineering, architec-
ture, teaching, various types of physical, chemical and bio-
logical sciences, pharmacy and other similar occupations 
that have a recognized professional status as distinguished 
from the mechanical arts or skilled trades where in some 
instances the knowledge is of a fairly advanced type, but 
is not in a field of science or learning. 
‘‘(d) The phrase ‘customarily acquired by a prolonged 
course of specialized intellectual instruction’ restricts the 
exemption to professions where specialized academic train-
ing is a standard prerequisite for entrance into the profes-
sion. The best prima facie evidence that an employee 
meets this requirement is possession of the appropriate 
academic degree. However, the word ‘customarily’ means 
that the exemption is also available to employees in such 
professions who have substantially the same knowledge 
level and perform substantially the same work as the 
degreed employees, but who attained the advanced knowl-
edge through a combination of work experience and intel-
lectual instruction. Thus, for example, the learned profes-
sional exemption is available to the occasional lawyer who 
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has not gone to law school, or the occasional chemist who 
is not the possessor of a degree in chemistry. However, 
the learned professional exemption is not available for oc-
cupations that customarily may be performed with only 
the general knowledge acquired by an academic degree in 
any field, with knowledge acquired through an apprentice-
ship, or with training in the performance of routine men-
tal, manual, mechanical or physical processes. The learned 
professional exemption also does not apply to occupations 
in which most employees have acquired their skill by expe-
rience rather than by advanced specialized intellectual in-
struction. 
‘‘(e)(1) Registered or certified medical technologists. 
Registered or certified medical technologists who have suc-
cessfully completed three academic years of pre-profes-
sional study in an accredited college or university plus a 
fourth year of professional course work in a school of med-
ical technology approved by the Council of Medical Edu-
cation of the American Medical Association generally meet 
the duties requirements for the learned professional ex-
emption. 
‘‘(2) Nurses. Registered nurses who are registered by 
the appropriate State examining board generally meet the 
duties requirements for the learned professional exemp-
tion. Licensed practical nurses and other similar health 
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care employees, however, generally do not qualify as ex-
empt learned professionals because possession of a special-
ized advanced academic degree is not a standard pre-
requisite for entry into such occupations. 
‘‘(3) Dental hygienists. Dental hygienists who have 
successfully completed four academic years of pre-profes-
sional and professional study in an accredited college or 
university approved by the Commission on Accreditation 
of Dental and Dental Auxiliary Educational Programs of 
the American Dental Association generally meet the duties 
requirements for the learned professional exemption. 
‘‘(4) Physician assistants. Physician assistants who 
have successfully completed four academic years of pre- 
professional and professional study, including graduation 
from a physician assistant program accredited by the Ac-
creditation Review Commission on Education for the Phy-
sician Assistant, and who are certified by the National 
Commission on Certification of Physician Assistants gen-
erally meet the duties requirements for the learned profes-
sional exemption. 
‘‘(5) Accountants. Certified public accountants gen-
erally meet the duties requirements for the learned profes-
sional exemption. In addition, many other accountants 
who are not certified public accountants but perform simi-
lar job duties may qualify as exempt learned professionals. 
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However, accounting clerks, bookkeepers and other em-
ployees who normally perform a great deal of routine work 
generally will not qualify as exempt professionals. 
‘‘(6) Chefs. Chefs, such as executive chefs and sous 
chefs, who have attained a four-year specialized academic 
degree in a culinary arts program, generally meet the du-
ties requirements for the learned professional exemption. 
The learned professional exemption is not available to 
cooks who perform predominantly routine mental, manual, 
mechanical or physical work. 
‘‘(7) Paralegals. Paralegals and legal assistants gen-
erally do not qualify as exempt learned professionals be-
cause an advanced specialized academic degree is not a 
standard prerequisite for entry into the field. Although 
many paralegals possess general four-year advanced de-
grees, most specialized paralegal programs are two-year 
associate degree programs from a community college or 
equivalent institution. However, the learned professional 
exemption is available for paralegals who possess advanced 
specialized degrees in other professional fields and apply 
advanced knowledge in that field in the performance of 
their duties. For example, if a law firm hires an engineer 
as a paralegal to provide expert advice on product liability 
cases or to assist on patent matters, that engineer would 
qualify for exemption. 
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‘‘(8) Athletic trainers. Athletic trainers who have suc-
cessfully completed four academic years of pre-profes-
sional and professional study in a specialized curriculum 
accredited by the Commission on Accreditation of Allied 
Health Education Programs and who are certified by the 
Board of Certification of the National Athletic Trainers 
Association Board of Certification generally meet the du-
ties requirements for the learned professional exemption. 
ø‘‘(9) Funeral directors or embalmers. Licensed fu-
neral directors and embalmers who are licensed by and 
working in a state that requires successful completion of 
four academic years of pre-professional and professional 
study, including graduation from a college of mortuary 
science accredited by the American Board of Funeral 
Service Education, generally meet the duties requirements 
for the learned professional exemption.¿ 
‘‘(f) The areas in which the professional exemption 
may be available are expanding. As knowledge is devel-
oped, academic training is broadened and specialized de-
grees are offered in new and diverse fields, thus creating 
new specialists in particular fields of science or learning. 
When an advanced specialized degree has become a stand-
ard requirement for a particular occupation, that occupa-
tion may have acquired the characteristics of a learned 
profession. Accrediting and certifying organizations simi-
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lar to those listed in paragraphs (e)(1), (e)(3), (e)(4) and 
(e)(8) of this section also may be created in the future. 
Such organizations may develop similar specialized cur-
riculums and certification programs which, if a standard 
requirement for a particular occupation, may indicate that 
the occupation has acquired the characteristics of a 
learned profession. 
‘‘§ 541.302 Creative professionals 
‘‘(a) To qualify for the creative professional exemp-
tion, an employee’s primary duty must be the performance 
of work requiring invention, imagination, originality or tal-
ent in a recognized field of artistic or creative endeavor 
as opposed to routine mental, manual, mechanical or phys-
ical work. The exemption does not apply to work which 
can be produced by a person with general manual or intel-
lectual ability and training. 
‘‘(b) To qualify for exemption as a creative profes-
sional, the work performed must be ‘in a recognized field 
of artistic or creative endeavor.’ This includes such fields 
as music, writing, acting and the graphic arts. 
‘‘(c) The requirement of ‘invention, imagination, orig-
inality or talent’ distinguishes the creative professions 
from work that primarily depends on intelligence, diligence 
and accuracy. The duties of employees vary widely, and 
exemption as a creative professional depends on the extent 
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of the invention, imagination, originality or talent exer-
cised by the employee. Determination of exempt creative 
professional status, therefore, must be made on a case- 
by-case basis. This requirement generally is met by actors, 
musicians, composers, conductors, and soloists; painters 
who at most are given the subject matter of their painting; 
cartoonists who are merely told the title or underlying con-
cept of a cartoon and must rely on their own creative abil-
ity to express the concept; essayists, novelists, short-story 
writers and screen-play writers who choose their own sub-
jects and hand in a finished piece of work to their employ-
ers (the majority of such persons are, of course, not em-
ployees but self-employed); and persons holding the more 
responsible writing positions in advertising agencies. This 
requirement generally is not met by a person who is em-
ployed as a copyist, as an ‘animator’ of motion-picture car-
toons, or as a retoucher of photographs, since such work 
is not properly described as creative in character. 
‘‘(d) Journalists may satisfy the duties requirements 
for the creative professional exemption if their primary 
duty is work requiring invention, imagination, originality 
or talent, as opposed to work which depends primarily on 
intelligence, diligence and accuracy. Employees of news-
papers, magazines, television and other media are not ex-
empt creative professionals if they only collect, organize 
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and record information that is routine or already public, 
or if they do not contribute a unique interpretation or 
analysis to a news product. Thus, for example, newspaper 
reporters who merely rewrite press releases or who write 
standard recounts of public information by gathering facts 
on routine community events are not exempt creative pro-
fessionals. Reporters also do not qualify as exempt cre-
ative professionals if their work product is subject to sub-
stantial control by the employer. However, journalists may 
qualify as exempt creative professionals if their primary 
duty is performing on the air in radio, television or other 
electronic media; conducting investigative interviews; ana-
lyzing or interpreting public events; writing editorials, 
opinion columns or other commentary; or acting as a nar-
rator or commentator. 
‘‘§ 541.303 Teachers 
‘‘(a) The term ‘employee employed in a bona fide pro-
fessional capacity’ in section 13(a)(1) of the Act also 
means any employee with a primary duty of teaching, tu-
toring, instructing or lecturing in the activity of imparting 
knowledge and who is employed and engaged in this activ-
ity as a teacher in an educational establishment by which 
the employee is employed. The term ‘educational establish-
ment’ is defined in §541.204(b). 
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‘‘(b) Exempt teachers include, but are not limited to: 
Regular academic teachers; teachers of kindergarten or 
nursery school pupils; teachers of gifted or disabled chil-
dren; teachers of skilled and semi-skilled trades and occu-
pations; teachers engaged in automobile driving instruc-
tion; aircraft flight instructors; home economics teachers; 
and vocal or instrumental music instructors. Those faculty 
members who are engaged as teachers but also spend a 
considerable amount of their time in extracurricular activi-
ties such as coaching athletic teams or acting as modera-
tors or advisors in such areas as drama, speech, debate 
or journalism are engaged in teaching. Such activities are 
a recognized part of the schools’ responsibility in contrib-
uting to the educational development of the student. 
‘‘(c) The possession of an elementary or secondary 
teacher’s certificate provides a clear means of identifying 
the individuals contemplated as being within the scope of 
the exemption for teaching professionals. Teachers who 
possess a teaching certificate qualify for the exemption re-
gardless of the terminology (e.g., permanent, conditional, 
standard, provisional, temporary, emergency, or unlim-
ited) used by the State to refer to different kinds of certifi-
cates. However, private schools and public schools are not 
uniform in requiring a certificate for employment as an 
elementary or secondary school teacher, and a teacher’s 
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certificate is not generally necessary for employment in in-
stitutions of higher education or other educational estab-
lishments. Therefore, a teacher who is not certified may 
be considered for exemption, provided that such individual 
is employed as a teacher by the employing school or school 
system. 
‘‘(d) The requirements of §541.300 and Subpart G 
(salary requirements) of this part do not apply to the 
teaching professionals described in this section. 
‘‘§ 541.304 Practice of law or medicine 
‘‘(a) The term ‘employee employed in a bona fide pro-
fessional capacity’ in section 13(a)(1) of the Act also shall 
mean: 
‘‘(1) Any employee who is the holder of a valid 
license or certificate permitting the practice of law 
or medicine or any of their branches and is actually 
engaged in the practice thereof; and 
‘‘(2) Any employee who is the holder of the req-
uisite academic degree for the general practice of 
medicine and is engaged in an internship or resident 
program pursuant to the practice of the profession. 
‘‘(b) In the case of medicine, the exemption applies 
to physicians and other practitioners licensed and prac-
ticing in the field of medical science and healing or any 
of the medical specialties practiced by physicians or practi-
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•HRES 1516 IH 
tioners. The term ‘physicians’ includes medical doctors in-
cluding general practitioners and specialists, osteopathic 
physicians (doctors of osteopathy), podiatrists, dentists 
(doctors of dental medicine), and optometrists (doctors of 
optometry or bachelors of science in optometry). 
‘‘(c) Employees engaged in internship or resident pro-
grams, whether or not licensed to practice prior to com-
mencement of the program, qualify as exempt profes-
sionals if they enter such internship or resident programs 
after the earning of the appropriate degree required for 
the general practice of their profession. 
‘‘(d) The requirements of §541.300 and subpart G 
(salary requirements) of this part do not apply to the em-
ployees described in this section. 
‘‘Subpart E—Computer Employees (§§541.400-541.402) 
‘‘§ 541.400 General rule for computer employees 
‘‘(a) Computer systems analysts, computer program-
mers, software engineers or other similarly skilled workers 
in the computer field are eligible for exemption as profes-
sionals under section 13(a)(1) of the Act and under sec-
tion 13(a)(17) of the Act. Because job titles vary widely 
and change quickly in the computer industry, job titles 
are not determinative of the applicability of this exemp-
tion. 
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‘‘(b) The section 13(a)(1)exemption applies to any 
computer employee who is compensated on a salary or fee 
basis at a rate of not less than $684 per week ø(or $455 
per week if employed in the Commonwealth of the North-
ern Mariana Islands, Guam, Puerto Rico, or the U.S. Vir-
gin Islands by employers other than the Federal govern-
ment, or $380 per week if employed in American Samoa 
by employers other than the Federal government)¿, exclu-
sive of board, lodging, or other facilities. 
‘‘The section 13(a)(17) exemption applies to any 
computer employee compensated on an hourly basis at a 
rate of not less than $27.63 an hour. In addition, under 
either section 13(a)(1) or section 13(a)(17) of the Act, the 
exemptions apply only to computer employees whose pri-
mary duty consists of: 
‘‘(1) The application of systems analysis tech-
niques 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 com-
puter systems or programs, including prototypes, 
based on and related to user or system design speci-
fications; 
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‘‘(3) The design, documentation, testing, cre-
ation or modification of computer programs related 
to machine operating systems; or 
‘‘(4) A combination of the aforementioned du-
ties, the performance of which requires the same 
level of skills. 
‘‘(c) The term ‘salary basis’ is defined at §541.602; 
‘fee basis’ is defined at §541.605; ‘board, lodging or other 
facilities’ is defined at §541.606; and ‘primary duty’ is de-
fined at §541.700. 
‘‘§ 541.401 Computer manufacture and repair 
‘‘The exemption for employees in computer occupa-
tions does not include employees engaged in the manufac-
ture or repair of computer hardware and related equip-
ment. Employees whose work is highly dependent upon, 
or facilitated by, the use of computers and computer soft-
ware programs (e.g., engineers, drafters and others skilled 
in computer-aided design software), but who are not pri-
marily engaged in computer systems analysis and pro-
gramming or other similarly skilled computer-related occu-
pations identified in §541.400(b), are also not exempt 
computer professionals. 
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‘‘§ 541.402 Executive and administrative computer 
employees 
‘‘Computer employees within the scope of this exemp-
tion, as well as those employees not within its scope, may 
also have executive and administrative duties which qual-
ify the employees for exemption under subpart B or sub-
part C of this part. For example, systems analysts and 
computer programmers generally meet the duties require-
ments for the administrative exemption if their primary 
duty includes work such as planning, scheduling, and co-
ordinating activities required to develop systems to solve 
complex business, scientific or engineering problems of the 
employer or the employer’s customers<<, constituents or 
stakeholders>>. Similarly, a senior or lead computer pro-
grammer who manages the work of two or more other pro-
grammers in a customarily recognized department or sub-
division of the employer, and whose recommendations as 
to the hiring, firing, advancement, promotion or other 
change of status of the other programmers are given par-
ticular weight, generally meets the duties requirements for 
the executive exemption. 
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‘‘Subpart F—<<Reserved>> 
ø‘‘Subpart F—Outside Sales Employees (§§541.500- 
541.504)¿ 
ø‘‘§ 541.500 General rule for outside sales employees 
ø‘‘(a) The term ‘employee employed in the capacity 
of outside salesman’ in section 13(a)(1) of the Act shall 
mean any employee:¿ 
ø‘‘(1) Whose primary duty is:¿ 
ø‘‘(i) making sales within the meaning of 
section 3(k) of the Act, or¿ 
ø‘‘(ii) obtaining orders or contracts for 
services or for the use of facilities for which a 
consideration will be paid by the client or cus-
tomer; and¿ 
ø‘‘(2) Who is customarily and regularly en-
gaged away from the employer’s place or places of 
business in performing such primary duty.¿ 
ø‘‘(b) The term ‘primary duty’ is defined at 
§541.700. In determining the primary duty of an outside 
sales employee, work performed incidental to and in con-
junction with the employee’s own outside sales or solicita-
tions, including incidental deliveries and collections, shall 
be regarded as exempt outside sales work. Other work that 
furthers the employee’s sales efforts also shall be regarded 
as exempt work including, for example, writing sales re-
ports, updating or revising the employee’s sales or display 
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catalogue, planning itineraries and attending sales con-
ferences.¿ 
ø‘‘(c) The requirements of subpart G (salary require-
ments) of this part do not apply to the outside sales em-
ployees described in this section.¿ 
ø‘‘§ 541.501 Making sales or obtaining orders 
ø‘‘(a) Section 541.500 requires that the employee be 
engaged in:¿ 
ø‘‘(1) Making sales within the meaning of sec-
tion 3(k) of the Act, or¿ 
ø‘‘(2) Obtaining orders or contracts for services 
or for the use of facilities.¿ 
ø‘‘(b) Sales within the meaning of section 3(k) of the 
Act include the transfer of title to tangible property, and 
in certain cases, of tangible and valuable evidences of in-
tangible property. Section 3(k) of the Act states that ‘sale’ 
or ‘sell’ includes any sale, exchange, contract to sell, con-
signment for sale, shipment for sale, or other disposition.¿ 
ø‘‘(c) Exempt outside sales work includes not only 
the sales of commodities, but also ‘obtaining orders or con-
tracts for services or for the use of facilities for which a 
consideration will be paid by the client or customer.’ Ob-
taining orders for ‘the use of facilities’ includes the selling 
of time on radio or television, the solicitation of adver-
tising for newspapers and other periodicals, and the solici-
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tation of freight for railroads and other transportation 
agencies.¿ 
ø‘‘(d) The word ‘services’ extends the outside sales 
exemption to employees who sell or take orders for a serv-
ice, which may be performed for the customer by someone 
other than the person taking the order.¿ 
ø‘‘§ 541.502 Away from employer’s place of business 
‘‘An outside sales employee must be customarily and 
regularly engaged ‘away from the employer’s place or 
places of business.’ The outside sales employee is an em-
ployee who makes sales at the customer’s place of business 
or, if selling door-to-door, at the customer’s home. Outside 
sales does not include sales made by mail, telephone or 
the Internet unless such contact is used merely as an ad-
junct to personal calls. Thus, any fixed site, whether home 
or office, used by a salesperson as a headquarters or for 
telephonic solicitation of sales is considered one of the em-
ployer’s places of business, even though the employer is 
not in any formal sense the owner or tenant of the prop-
erty. However, an outside sales employee does not lose the 
exemption by displaying samples in hotel sample rooms 
during trips from city to city; these sample rooms should 
not be considered as the employer’s places of business. 
Similarly, an outside sales employee does not lose the ex-
emption by displaying the employer’s products at a trade 
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show. If selling actually occurs, rather than just sales pro-
motion, trade shows of short duration (i.e., one or two 
weeks) should not be considered as the employer’s place 
of business.¿ 
ø‘‘§ 541.503 Promotion work 
ø‘‘(a) Promotion work is one type of activity often 
performed by persons who make sales, which may or may 
not be exempt outside sales work, depending upon the cir-
cumstances under which it is performed. Promotional 
work that is actually performed incidental to and in con-
junction with an employee’s own outside sales or solicita-
tions is exempt work. On the other hand, promotional 
work that is incidental to sales made, or to be made, by 
someone else is not exempt outside sales work. An em-
ployee who does not satisfy the requirements of this sub-
part may still qualify as an exempt employee under other 
subparts of this rule.¿ 
ø‘‘(b) A manufacturer’s representative, for example, 
may perform various types of promotional activities such 
as putting up displays and posters, removing damaged or 
spoiled stock from the merchant’s shelves or rearranging 
the merchandise. Such an employee can be considered an 
exempt outside sales employee if the employee’s primary 
duty is making sales or contracts. Promotion activities di-
rected toward consummation of the employee’s own sales 
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are exempt. Promotional activities designed to stimulate 
sales that will be made by someone else are not exempt 
outside sales work.¿ 
ø‘‘(c) Another example is a company representative 
who visits chain stores, arranges the merchandise on 
shelves, replenishes stock by replacing old with new mer-
chandise, sets up displays and consults with the store 
manager when inventory runs low, but does not obtain a 
commitment for additional purchases. The arrangement of 
merchandise on the shelves or the replenishing of stock 
is not exempt work unless it is incidental to and in con-
junction with the employee’s own outside sales. Because 
the employee in this instance does not consummate the 
sale nor direct efforts toward the consummation of a sale, 
the work is not exempt outside sales work.¿ 
ø‘‘§ 541.504 Drivers who sell 
ø‘‘(a) Drivers who deliver products and also sell such 
products may qualify as exempt outside sales employees 
only if the employee has a primary duty of making sales. 
In determining the primary duty of drivers who sell, work 
performed incidental to and in conjunction with the em-
ployee’s own outside sales or solicitations, including load-
ing, driving or delivering products, shall be regarded as 
exempt outside sales work.¿ 
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ø‘‘(b) Several factors should be considered in deter-
mining if a driver has a primary duty of making sales, 
including, but not limited to: a comparison of the driver’s 
duties with those of other employees engaged as truck 
drivers and as salespersons; possession of a selling or so-
licitor’s license when such license is required by law or 
ordinances; presence or absence of customary or contrac-
tual arrangements concerning amounts of products to be 
delivered; description of the employee’s occupation in col-
lective bargaining agreements; the employer’s specifica-
tions as to qualifications for hiring; sales training; attend-
ance at sales conferences; method of payment; and propor-
tion of earnings directly attributable to sales.¿ 
ø‘‘(c) Drivers who may qualify as exempt outside 
sales employees include:¿ 
ø‘‘(1) A driver who provides the only sales con-
tact between the employer and the customers visited, 
who calls on customers and takes orders for prod-
ucts, who delivers products from stock in the em-
ployee’s vehicle or procures and delivers the product 
to the customer on a later trip, and who receives 
compensation commensurate with the volume of 
products sold.¿ 
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ø‘‘(2) A driver who obtains or solicits orders for 
the employer’s products from persons who have au-
thority to commit the customer for purchases.¿ 
ø‘‘(3) A driver who calls on new prospects for 
customers along the employee’s route and attempts 
to convince them of the desirability of accepting reg-
ular delivery of goods.¿ 
ø‘‘(4) A driver who calls on established cus-
tomers along the route and persuades regular cus-
tomers to accept delivery of increased amounts of 
goods or of new products, even though the initial 
sale or agreement for delivery was made by someone 
else.¿ 
ø‘‘(d) Drivers who generally would not qualify as ex-
empt outside sales employees include:¿ 
ø‘‘(1) A route driver whose primary duty is to 
transport products sold by the employer through 
vending machines and to keep such machines 
stocked, in good operating condition, and in good lo-
cations.¿ 
ø‘‘(2) A driver who often calls on established 
customers day after day or week after week, deliv-
ering a quantity of the employer’s products at each 
call when the sale was not significantly affected by 
solicitations of the customer by the delivering driver 
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or the amount of the sale is determined by the vol-
ume of the customer’s sales since the previous deliv-
ery.¿ 
ø‘‘(3) A driver primarily engaged in making de-
liveries to customers and performing activities in-
tended to promote sales by customers (including 
placing point-of-sale and other advertising materials, 
price stamping commodities, arranging merchandise 
on shelves, in coolers or in cabinets, rotating stock 
according to date, and cleaning and otherwise serv-
icing display cases), unless such work is in further-
ance of the driver’s own sales efforts.¿ 
‘‘Subpart G—Salary Requirements (§§541.600-541.607) 
‘‘§ 541.600 Amount of salary required 
‘‘(a) To qualify as an exempt executive, administra-
tive or professional employee under section 13(a)(1) of the 
Act, an employee must be compensated on a salary basis 
at a rate of not less than $684 per week ø(or $455 per 
week if employed in the Commonwealth of the Northern 
Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin 
Islands by employers other than the Federal Government, 
or $380 per week if employed in American Samoa by em-
ployers other than the Federal Government)¿, exclusive of 
board, lodging or other facilities. Administrative and pro-
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fessional employees may also be paid on a fee basis, as 
defined in §541.605. 
‘‘(b) The required amount of compensation per week 
may be translated into equivalent amounts for periods 
longer than one week. For example, the $684-per-week re-
quirement will be met if the employee is compensated bi-
weekly on a salary basis of not less than $1,368, semi-
monthly on a salary basis of not less than $1,482, or 
monthly on a salary basis of not less than $2,964. How-
ever, the shortest period of payment that will meet this 
compensation requirement is one week. 
‘‘(c) In the case of academic administrative employ-
ees, the compensation requirement also may be met by 
compensation on a salary basis at a rate at least equal 
to the entrance salary for teachers in the educational es-
tablishment by which the employee is employed, as pro-
vided in §541.204(a)(1). 
‘‘(d) In the case of computer employees, the com-
pensation requirement also may be met by compensation 
on an hourly basis at a rate not less than $27.63 an hour, 
as provided in §541.400(b). 
‘‘(e) In the case of professional employees, the com-
pensation requirements in this section shall not apply to 
employees engaged as teachers (see §541.303); employees 
who hold a valid license or certificate permitting the prac-
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tice of law or medicine or any of their branches and are 
actually engaged in the practice thereof (see §541.304); 
or to employees who hold the requisite academic degree 
for the general practice of medicine and are engaged in 
an internship or resident program pursuant to the practice 
of the profession (see §541.304). In the case of medical 
occupations, the exception from the salary or fee require-
ment does not apply to pharmacists, nurses, therapists, 
technologists, sanitarians, dietitians, social workers, psy-
chologists, psychometrists, or other professions which 
service the medical profession. 
‘‘§ 541.601 Highly compensated employees 
‘‘(a)(1) Beginning on øJanuary 1, 2020¿<<the ef-
fective date of these Substantive Regulations>>, an em-
ployee with total annual compensation of at least 
$107,432 is deemed exempt under section 13(a)(1) of the 
Act if the employee customarily and regularly performs 
any one or more of the exempt duties or responsibilities 
of an executive, administrative or professional employee 
as identified in subparts B, C or D of this part. 
‘‘(2) Where the annual period covers periods both 
prior to and after øJanuary 1, 2020¿<<the effective date 
of these Substantive Regulations>>, the amount of total 
annual compensation due will be determined on a propor-
tional basis. 
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‘‘(b)(1) ‘Total annual compensation’ must include at 
least $684 per week paid on a salary or fee basis as set 
forth 
in 
§541.602 
and 
541.605, 
except 
that 
§541.602(a)(3) shall not apply to highly compensated em-
ployees. Total annual compensation may also include com-
missions, nondiscretionary bonuses and other nondis-
cretionary compensation earned during a 52-week period. 
Total annual compensation does not include board, lodg-
ing and other facilities as defined in §541.606, and does 
not include payments for medical insurance, payments for 
life insurance, contributions to retirement plans and the 
cost of other fringe benefits. 
‘‘(2) If an employee’s total annual compensation does 
not total at least the amount specified in the applicable 
subsection of paragraph (a) by the last pay period of the 
52-week period, the employer may, during the last pay pe-
riod or within one month after the end of the 52-week 
period, make one final payment sufficient to achieve the 
required level. For example, for a 52-week period øbegin-
ning January 1, 2020¿, an employee may earn $90,000 
in base salary, and the employer may anticipate øbased 
upon past sales¿ that the employee also will earn $17,432 
in øcommissions¿<<other payments>>. However, ødue 
to poor sales¿ in the final quarter of the year, the em-
ployee actually only earns $12,000 in øcommis-
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sions¿<<other payments>>. In this situation, the em-
ployer may within one month after the end of the year 
make a payment of at least $5,432 to the employee. Any 
such final payment made after the end of the 52-week pe-
riod may count only toward the prior year’s total annual 
compensation and not toward the total annual compensa-
tion in the year it was paid. If the employer fails to make 
such a payment, the employee does not qualify as a highly 
compensated employee, but may still qualify as exempt 
under subparts B, C, or D of this part. 
‘‘(3) An employee who does not work a full year for 
the employer, either because the employee is newly hired 
after the beginning of the year or ends the employment 
before the end of the year, may qualify for exemption 
under this section if the employee receives a pro rata por-
tion of the minimum amount established in paragraph (a) 
of this section, based upon the number of weeks that the 
employee will be or has been employed. An employer may 
make one final payment as under paragraph (b)(2) of this 
section within one month after the end of employment. 
‘‘(4) The employer may utilize any 52-week period 
as the year, such as a calendar year, a fiscal year, or an 
anniversary of hire year. If the employer does not identify 
some other year period in advance, the calendar year will 
apply. 
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‘‘(c) A high level of compensation is a strong indi-
cator of an employee’s exempt status, thus eliminating the 
need for a detailed analysis of the employee’s job duties. 
Thus, a highly compensated employee will qualify for ex-
emption if the employee customarily and regularly per-
forms any one or more of the exempt duties or responsibil-
ities of an executive, administrative or professional em-
ployee identified in subparts B, C or D of this part. An 
employee may qualify as a highly compensated executive 
employee, for example, if the employee customarily and 
regularly directs the work of two or more other employees, 
even though the employee does not meet all of the other 
requirements for the executive exemption under §541.100. 
‘‘(d) This section applies only to employees whose pri-
mary duty includes performing office or non-manual work. 
Thus, for example, non-management production-line work-
ers and non-management employees in maintenance, con-
struction and similar occupations such as carpenters, elec-
tricians, mechanics, plumbers, iron workers, craftsmen, 
operating engineers, longshoremen, construction workers, 
laborers and other employees who perform work involving 
repetitive operations with their hands, physical skill and 
energy are not exempt under this section no matter how 
highly paid they might be. 
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‘‘§ 541.602 Salary basis 
‘‘(a) General rule. An employee will be considered to 
be paid on a ‘salary basis’ within the meaning of this part 
if the employee regularly receives each pay period on a 
weekly, or less frequent basis, a predetermined amount 
constituting all or part of the employee’s compensation, 
which amount is not subject to reduction because of vari-
ations in the quality or quantity of the work performed. 
‘‘(1) Subject to the exceptions provided in para-
graph (b) of this section, an exempt employee must 
receive the full salary for any week in which the em-
ployee performs any work without regard to the 
number of days or hours worked. Exempt employees 
need not be paid for any workweek in which they 
perform no work. 
‘‘(2) An employee is not paid on a salary basis 
if deductions from the employee’s predetermined 
compensation are made for absences occasioned by 
the employer or by the operating requirements of the 
øbusiness¿ <<employing office>>. If the employee 
is ready, willing and able to work, deductions may 
not be made for time when work is not available. 
‘‘(3) Up to ten percent of the salary amount re-
quired by §541.600(a) may be satisfied by the pay-
ment of nondiscretionary bonuses, incentives and 
commissions, that are paid annually or more fre-
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quently. The employer may utilize any 52-week pe-
riod as the year, such as a calendar year, a fiscal 
year, or an anniversary of hire year. If the employer 
does not identify some other year period in advance, 
the calendar year will apply. This provision does not 
apply to highly compensated employees under 
§541.601. 
‘‘(i) If by the last pay period of the 52- 
week period the sum of the employee’s weekly 
salary plus nondiscretionary bonus, incentive, 
and commission payments received is less than 
52 times the weekly salary amount required by 
§541.600(a), the employer may make one final 
payment sufficient to achieve the required level 
no later than the next pay period after the end 
of the year. Any such final payment made after 
the end of the 52-week period may count only 
toward the prior year’s salary amount and not 
toward the salary amount in the year it was 
paid. 
‘‘(ii) An employee who does not work a full 
52-week period for the employer, either because 
the employee is newly hired after the beginning 
of this period or ends the employment before 
the end of this period, may qualify for exemp-
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•HRES 1516 IH 
tion if the employee receives a pro rata portion 
of the minimum amount established in para-
graph (a)(3) of this section, based upon the 
number of weeks that the employee will be or 
has been employed. An employer may make one 
final payment as under paragraph (a)(3)(i) of 
this section within one pay period after the end 
of employment. 
‘‘(b) Exceptions. The prohibition against deductions 
from pay in the salary basis requirement is subject to the 
following exceptions: 
‘‘(1) Deductions from pay may be made when 
an exempt employee is absent from work for one or 
more full days for personal reasons, other than sick-
ness or disability. Thus, if an employee is absent for 
two full days to handle personal affairs, the employ-
ee’s salaried status will not be affected if deductions 
are made from the salary for two full-day absences. 
However, if an exempt employee is absent for one 
and a half days for personal reasons, the employer 
can deduct only for the one full-day absence. 
‘‘(2) Deductions from pay may be made for ab-
sences of one or more full days occasioned by sick-
ness or disability (including work-related accidents) 
if the deduction is made in accordance with a bona 
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fide plan, policy or practice of providing compensa-
tion for loss of salary occasioned by such sickness or 
disability. The employer is not required to pay any 
portion of the employee’s salary for full-day absences 
for which the employee receives compensation under 
the plan, policy or practice. Deductions for such full- 
day absences also may be made before the employee 
has qualified under the plan, policy or practice, and 
after the employee has exhausted the leave allowance 
thereunder. Thus, for example, if an employer main-
tains a short-term disability insurance plan pro-
viding salary replacement for 12 weeks starting on 
the fourth day of absence, the employer may make 
deductions from pay for the three days of absence 
before the employee qualifies for benefits under the 
plan; for the twelve weeks in which the employee re-
ceives salary replacement benefits under the plan; 
and for absences after the employee has exhausted 
the 12 weeks of salary replacement benefits. øSimi-
larly, an employer may make deductions from pay 
for absences of one or more full days if salary re-
placement benefits are provided under a State dis-
ability insurance law or under a State workers’ com-
pensation law.¿ 
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‘‘(3) While an employer cannot make deduc-
tions from pay for absences of an exempt employee 
occasioned by jury duty, attendance as a witness or 
temporary military leave, the employer can offset 
any amounts received by an employee as jury fees, 
witness fees or military pay for a particular week 
against the salary due for that particular week with-
out loss of the exemption. 
‘‘(4) Deductions from pay of exempt employees 
may be made for penalties imposed in good faith for 
infractions of safety rules of major significance. 
Safety rules of major significance include those re-
lating to the prevention of serious danger in the 
workplace or to other employees, such as rules pro-
hibiting smoking in explosive plants, oil refineries 
and coal mines. 
‘‘(5) Deductions from pay of exempt employees 
may be made for unpaid disciplinary suspensions of 
one or more full days imposed in good faith for in-
fractions of workplace conduct rules. Such suspen-
sions must be imposed pursuant to a written policy 
applicable to all employees. Thus, for example, an 
employer may suspend an exempt employee without 
pay for three days for violating a generally applica-
ble written policy prohibiting sexual harassment. 
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Similarly, an employer may suspend an exempt em-
ployee without pay for twelve days for violating a 
generally applicable written policy prohibiting work-
place violence. 
‘‘(6) An employer is not required to pay the full 
salary in the initial or terminal week of employment. 
Rather, an employer may pay a proportionate part 
of an employee’s full salary for the time actually 
worked in the first and last week of employment. In 
such weeks, the payment of an hourly or daily equiv-
alent of the employee’s full salary for the time actu-
ally worked will meet the requirement. However, em-
ployees are not paid on a salary basis within the 
meaning of these regulations if they are employed 
occasionally for a few days, and the employer pays 
them a proportionate part of the weekly salary when 
so employed. 
‘‘(7) An employer is not required to pay the full 
salary for weeks in which an exempt employee takes 
unpaid leave under the Family and Medical Leave 
Act. Rather, when an exempt employee takes unpaid 
leave under the Family and Medical Leave Act, an 
employer may pay a proportionate part of the full 
salary for time actually worked. For example, if an 
employee who normally works 40 hours per week 
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uses four hours of unpaid leave under the Family 
and Medical Leave Act, the employer could deduct 
10 percent of the employee’s normal salary that 
week. 
‘‘(c) When calculating the amount of a deduction 
from pay allowed under paragraph (b) of this section, the 
employer may use the hourly or daily equivalent of the 
employee’s full weekly salary or any other amount propor-
tional to the time actually missed by the employee. A de-
duction from pay as a penalty for violations of major safe-
ty rules under paragraph (b)(4) of this section may be 
made in any amount. 
‘‘§ 541.603 Effect of improper deductions from salary 
‘‘(a) An employer who makes improper deductions 
from salary shall lose the exemption if the facts dem-
onstrate that the employer did not intend to pay employees 
on a salary basis. An actual practice of making improper 
deductions demonstrates that the employer did not intend 
to pay employees on a salary basis. The factors to consider 
when determining whether an employer has an actual 
practice of making improper deductions include, but are 
not limited to: the number of improper deductions, par-
ticularly as compared to the number of employee infrac-
tions warranting discipline; the time period during which 
the employer made improper deductions; the number and 
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geographic location of employees whose salary was im-
properly reduced; the number and geographic location of 
managers responsible for taking the improper deductions; 
and whether the employer has a clearly communicated pol-
icy permitting or prohibiting improper deductions. 
‘‘(b) If the facts demonstrate that the employer has 
an actual practice of making improper deductions, the ex-
emption is lost during the time period in which the im-
proper deductions were made for employees in the same 
job classification working for the same managers respon-
sible for the actual improper deductions. Employees in dif-
ferent job classifications or who work for different man-
agers do not lose their status as exempt employees. Thus, 
for example, if a manager øat a company facility¿ rou-
tinely docks the pay of engineers at that facility for par-
tial-day personal absences, then all engineers at that facil-
ity whose pay could have been improperly docked by the 
manager would lose the exemption; engineers at other fa-
cilities or working for other managers, however, would re-
main exempt. 
‘‘(c) Improper deductions that are either isolated or 
inadvertent will not result in loss of the exemption for any 
employees subject to such improper deductions, if the em-
ployer reimburses the employees for such improper deduc-
tions. 
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•HRES 1516 IH 
‘‘(d) If an employer has a clearly communicated pol-
icy that prohibits the improper pay deductions specified 
in §541.602(a) and includes a complaint mechanism, re-
imburses employees for any improper deductions and 
makes a good faith commitment to comply in the future, 
such employer will not lose the exemption for any employ-
ees unless the employer willfully violates the policy by con-
tinuing to make improper deductions after receiving em-
ployee complaints. If an employer fails to reimburse em-
ployees for any improper deductions or continues to make 
improper deductions after receiving employee complaints, 
the exemption is lost during the time period in which the 
improper deductions were made for employees in the same 
job classification working for the same managers respon-
sible for the actual improper deductions. The best evidence 
of a clearly communicated policy is a written policy that 
was distributed to employees prior to the improper pay 
deductions by, for example, providing a copy of the policy 
to employees at the time of hire, publishing the policy in 
an employee handbook or publishing the policy on the em-
ployer’s Intranet. 
‘‘(e) This section shall not be construed in an unduly 
technical manner so as to defeat the exemption. 
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‘‘§ 541.604 Minimum guarantee plus extras 
‘‘(a) An employer may provide an exempt employee 
with additional compensation without losing the exemption 
or violating the salary basis requirement, if the employ-
ment arrangement also includes a guarantee of at least 
the minimum weekly-required amount paid on a salary 
basis. Thus, for example, an exempt employee guaranteed 
at least $684 each week paid on a salary basis may also 
receive additional compensation of a one percent commis-
sion on sales. An exempt employee also may receive a per-
centage of the sales or profits of the employer if the em-
ployment arrangement also includes a guarantee of at 
least $684 each week paid on a salary basis. Similarly, 
the exemption is not lost if an exempt employee who is 
guaranteed at least $684 each week paid on a salary basis 
also receives additional compensation based on hours 
worked for work beyond the normal workweek. Such addi-
tional compensation may be paid on any basis (e.g., flat 
sum, bonus payment, straight-time hourly amount, time 
and one-half or any other basis), and may include paid 
time off. 
‘‘(b) An exempt employee’s earnings may be com-
puted on an hourly, a daily or a shift basis, without losing 
the exemption or violating the salary basis requirement, 
if the employment arrangement also includes a guarantee 
of at least the minimum weekly required amount paid on 
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•HRES 1516 IH 
a salary basis regardless of the number of hours, days or 
shifts worked, and a reasonable relationship exists between 
the guaranteed amount and the amount actually earned. 
The reasonable relationship test will be met if the weekly 
guarantee is roughly equivalent to the employee’s usual 
earnings at the assigned hourly, daily or shift rate for the 
employee’s normal scheduled workweek. Thus, for exam-
ple, an exempt employee guaranteed compensation of at 
least $725 for any week in which the employee performs 
any work, and who normally works four or five shifts each 
week, may be paid $210 per shift without violating the 
$684-per-week salary basis requirement. The reasonable 
relationship requirement applies only if the employee’s pay 
is computed on an hourly, daily or shift basis. It does not 
apply, for example, to an exempt store manager paid a 
guaranteed salary per week that exceeds the current salary 
level who also receives a commission of one-half percent 
of all sales in the store or five percent of the store’s prof-
its, which in some weeks may total as much as, or even 
more than, the guaranteed salary. 
‘‘§ 541.605 Fee basis 
‘‘(a) Administrative and professional employees may 
be paid on a fee basis, rather than on a salary basis. An 
employee will be considered to be paid on a ‘fee basis’ 
within the meaning of these regulations if the employee 
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is paid an agreed sum for a single job regardless of the 
time required for its completion. These payments resemble 
piecework payments with the important distinction that 
generally a ‘fee’ is paid for the kind of job that is unique 
rather than for a series of jobs repeated an indefinite num-
ber of times and for which payment on an identical basis 
is made over and over again. Payments based on the num-
ber of hours or days worked and not on the accomplish-
ment of a given single task are not considered payments 
on a fee basis. 
‘‘(b) To determine whether the fee payment meets the 
minimum amount of salary required for exemption under 
these regulations, the amount paid to the employee will 
be tested by determining the time worked on the job and 
whether the fee payment is at a rate that would amount 
to at least the minimum salary per week, as required by 
§541.600(a) and 541.602(a), if the employee worked 40 
hours. Thus, an artist paid $350 for a picture that took 
20 hours to complete meets the $684 minimum salary re-
quirement for exemption since earnings at this rate would 
yield the artist $700 if 40 hours were worked. 
‘‘§ 541.606 Board, lodging or other facilities 
‘‘(a) To qualify for exemption under section 13(a)(1) 
of the Act, an employee must earn the minimum salary 
amount set forth in §541.600, ‘exclusive of board, lodging 
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•HRES 1516 IH 
or other facilities.’ The phrase ‘exclusive of board, lodging 
or other facilities’ means ‘free and clear’ or independent 
of any claimed credit for non-cash items of value that an 
employer may provide to an employee. Thus, the costs in-
curred by an employer to provide an employee with board, 
lodging or other facilities may not count towards the min-
imum salary amount required for exemption under this 
part 541. Such separate transactions are not prohibited 
between employers and their exempt employees, but the 
costs to employers associated with such transactions may 
not be considered when determining if an employee has 
received the full required minimum salary payment. 
‘‘(b) Regulations defining what constitutes ‘board, 
lodging, or other facilities’ are contained in 29 CFR part 
531. As described in 29 CFR 531.32, the term ‘other fa-
cilities’ refers to items similar to board and lodging, such 
as meals furnished at company restaurants or cafeterias 
or by hospitals, hotels, or restaurants to their employees; 
meals, dormitory rooms, and tuition furnished by a college 
to its student employees; merchandise furnished at com-
pany stores or commissaries, including articles of food, 
clothing, and household effects; housing furnished for 
dwelling purposes; and transportation furnished to em-
ployees for ordinary commuting between their homes and 
work. 
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ø‘‘§ 541.607 Reserved by 85 FR 34970 Effective: June 
8, 2020 <<541.607 - Reserved.>> 
‘‘Subpart H—Definitions and Miscellaneous 
Provisions (§§541.700-541.710) 
‘‘§ 541.700 Primary duty 
‘‘(a) To qualify for exemption under this part, an em-
ployee’s ‘primary duty’ must be the performance of exempt 
work. The term ‘primary duty’ means the principal, main, 
major or most important duty that the employee performs. 
Determination of an employee’s primary duty must be 
based on all the facts in a particular case, with the major 
emphasis on the character of the employee’s job as a 
whole. Factors to consider when determining the primary 
duty of an employee include, but are not limited to, the 
relative importance of the exempt duties as compared with 
other types of duties; the amount of time spent performing 
exempt work; the employee’s relative freedom from direct 
supervision; and the relationship between the employee’s 
salary and the wages paid to other employees for the kind 
of nonexempt work performed by the employee. 
‘‘(b) The amount of time spent performing exempt 
work can be a useful guide in determining whether exempt 
work is the primary duty of an employee. Thus, employees 
who spend more than 50 percent of their time performing 
exempt work will generally satisfy the primary duty re-
quirement. Time alone, however, is not the sole test, and 
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•HRES 1516 IH 
nothing in this section requires that exempt employees 
spend more than 50 percent of their time performing ex-
empt work. Employees who do not spend more than 50 
percent of their time performing exempt duties may none-
theless meet the primary duty requirement if the other 
factors support such a conclusion. 
‘‘(c) Thus, for example, assistant managers in a retail 
establishment who perform exempt executive work such as 
supervising and directing the work of other employees, or-
dering merchandise, managing the budget and authorizing 
payment of bills may have management as their primary 
duty even if the assistant managers spend more than 50 
percent of the time performing nonexempt work such as 
running the cash register. However, if such assistant man-
agers are closely supervised and earn little more than the 
nonexempt employees, the assistant managers generally 
would not satisfy the primary duty requirement. 
‘‘§ 541.701 Customarily and regularly 
‘‘The phrase ‘customarily and regularly’ means a fre-
quency that must be greater than occasional but which, 
of course, may be less than constant. Tasks or work per-
formed ‘customarily and regularly’ includes work normally 
and recurrently performed every workweek; it does not in-
clude isolated or one-time tasks. 
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‘‘§ 541.702 Exempt and nonexempt work 
‘‘The term ‘exempt work’ means all work described 
in §541.100, 541.101, 541.200, 541.300, 541.301, 
541.302, 541.303, 541.304, <<and>> 541.400 øand 
541.500¿, and the activities directly and closely related 
to such work. All other work is considered ‘nonexempt.’ 
‘‘§ 541.703 Directly and closely related 
‘‘(a) Work that is ‘directly and closely related’ to the 
performance of exempt work is also considered exempt 
work. The phrase ‘directly and closely related’ means 
tasks that are related to exempt duties and that contribute 
to or facilitate performance of exempt work. Thus, ‘di-
rectly and closely related’ work may include physical tasks 
and menial tasks that arise out of exempt duties, and the 
routine work without which the exempt employee’s exempt 
work cannot be performed properly. Work ‘directly and 
closely related’ to the performance of exempt duties may 
also include recordkeeping; monitoring and adjusting ma-
chinery; taking notes; using the computer to create docu-
ments or presentations; opening the mail for the purpose 
of reading it and making decisions; and using a photo-
copier or fax machine. Work is not ‘directly and closely 
related’ if the work is remotely related or completely unre-
lated to exempt duties. 
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•HRES 1516 IH 
‘‘(b) The following examples further illustrate the 
type of work that is and is not normally considered as 
directly and closely related to exempt work: 
‘‘(1) Keeping time, production or sales records 
for subordinates is work directly and closely related 
to an exempt executive’s function of managing a de-
partment and supervising employees. 
‘‘(2) The distribution of materials, merchandise 
or supplies to maintain control of the flow of and ex-
penditures for such items is directly and closely re-
lated to the performance of exempt duties. 
‘‘(3) A supervisor who spot checks and exam-
ines the work of subordinates to determine whether 
they are performing their duties properly, and 
whether the product is satisfactory, is performing 
work which is directly and closely related to manage-
rial and supervisory functions, so long as the check-
ing is distinguishable from the work ordinarily per-
formed by a nonexempt inspector. 
‘‘(4) A supervisor who sets up a machine may 
be engaged in exempt work, depending upon the na-
ture of the industry and the operation. In some 
cases the setup work, or adjustment of the machine 
for a particular job, is typically performed by the 
same employees who operate the machine. Such 
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•HRES 1516 IH 
setup work is part of the production operation and 
is not exempt. In other cases, the setting up of the 
work is a highly skilled operation which the ordinary 
production worker or machine tender typically does 
not perform. In large plants, non-supervisors may 
perform such work. However, particularly in small 
plants, such work may be a regular duty of the exec-
utive and is directly and closely related to the execu-
tive’s responsibility for the work performance of sub-
ordinates and for the adequacy of the final product. 
Under such circumstances, it is exempt work. 
‘‘(5) A department manager in a retail or serv-
ice establishment who walks about the sales floor ob-
serving the work of sales personnel under the em-
ployee’s supervision to determine the effectiveness of 
their sales techniques, checks on the quality of cus-
tomer service being given, or observes customer pref-
erences is performing work which is directly and 
closely related to managerial and supervisory func-
tions. 
‘‘(6) A business consultant may take extensive 
notes recording the flow of work and materials 
through the office or plant of the client; after re-
turning to the office of the employer, the consultant 
may personally use the computer to type a report 
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and create a proposed table of organization. Stand-
ing alone, or separated from the primary duty, such 
note-taking and typing would be routine in nature. 
However, because this work is necessary for ana-
lyzing the data and making recommendations, the 
work is directly and closely related to exempt work. 
While it is possible to assign note-taking and typing 
to nonexempt employees, and in fact it is frequently 
the practice to do so, delegating such routine tasks 
is not required as a condition of exemption. 
‘‘(7) A øcredit¿ manager who makes and ad-
ministers the øcredit¿<<budget>> policy of the 
øemployer¿<<employing 
office>>, 
establishes 
øcredit¿<<spending>> 
limits 
for 
øcus-
tomers¿<<the employing office>>, <<and>> 
authorizes øthe shipment of orders on credit, and 
makes decisions on whether to exceed credit lim-
its¿<<expenditures>> would be performing work 
exempt under §541.200. Work that is directly and 
closely related to these exempt duties may include 
checking the status of accounts to determine wheth-
er the credit limit would be exceeded by the ship-
ment of a new order, removing credit reports from 
the files for analysis, and writing letters giving cred-
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•HRES 1516 IH 
it data and experience to other employers or credit 
agencies. 
‘‘(8) A traffic manager in charge of planning a 
company’s transportation, including the most eco-
nomical and quickest routes for shipping merchan-
dise to and from the plant, contracting for common- 
carrier and other transportation facilities, negoti-
ating with carriers for adjustments for damages to 
merchandise, and making the necessary rearrange-
ments resulting from delays, damages or irregular-
ities in transit, is performing exempt work. If the 
employee also spends part of the day taking tele-
phone orders for local deliveries, such order-taking is 
a routine function and is not directly and closely re-
lated to the exempt work. 
‘‘(9) An example of work directly and closely re-
lated to exempt professional duties is a chemist per-
forming menial tasks such as cleaning a test tube in 
the middle of an original experiment, even though 
such menial tasks can be assigned to laboratory as-
sistants. 
‘‘(10) A teacher performs work directly and 
closely related to exempt duties when, while taking 
students on a field trip, the teacher drives a school 
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•HRES 1516 IH 
van or monitors the students’ behavior in a res-
taurant. 
‘‘§ 541.704 Use of manuals 
‘‘The use of manuals, guidelines or other established 
procedures containing or relating to highly technical, sci-
entific, legal, financial or other similarly complex matters 
that can be understood or interpreted only by those with 
advanced or specialized knowledge or skills does not pre-
clude exemption under section 13(a)(1) of the Act or the 
regulations in this part. Such manuals and procedures 
provide guidance in addressing difficult or novel cir-
cumstances and thus use of such reference material would 
not affect an employee’s exempt status. The section 
13(a)(1) exemptions are not available, however, for em-
ployees who simply apply well-established techniques or 
procedures described in manuals or other sources within 
closely prescribed limits to determine the correct response 
to an inquiry or set of circumstances. 
‘‘§ 541.705 Trainees 
‘‘The executive, administrative, professional, øoutside 
sales¿ and computer employee exemptions do not apply 
to employees training for employment in an executive, ad-
ministrative, professional, øoutside sales¿ or computer 
employee capacity who are not actually performing the du-
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•HRES 1516 IH 
ties of an executive, administrative, professional, øoutside 
sales¿ or computer employee. 
‘‘§ 541.706 Emergencies 
‘‘(a) An exempt employee will not lose the exemption 
by performing work of a normally nonexempt nature be-
cause of the existence of an emergency. Thus, when emer-
gencies arise that threaten the safety of employees, a ces-
sation of operations or serious damage to the employer’s 
property, any work performed in an effort to prevent such 
results is considered exempt work. 
‘‘(b) An ‘emergency’ does not include occurrences 
that are not beyond control or for which the employer can 
reasonably provide in the normal course of business. 
Emergencies generally occur only rarely, and are events 
that the employer cannot reasonably anticipate. 
‘‘(c) The following examples illustrate the distinction 
between emergency work considered exempt work and rou-
tine work that is not exempt work: 
‘‘(1) øA mine superintendent who pitches in 
after an explosion and digs out workers who are 
trapped in the mine is still a bona fide execu-
tive.¿<<Reserved.>> 
‘‘(2) Assisting nonexempt employees with their 
work during periods of heavy workload or to handle 
rush orders is not exempt work. 
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•HRES 1516 IH 
‘‘(3) Replacing a nonexempt employee during 
the first day or partial day of an illness may be con-
sidered exempt emergency work depending on fac-
tors 
such 
as 
the 
size 
of 
the 
øestablish-
ment¿<<location>> and of the executive’s depart-
ment, the nature of the øindustry¿<<work per-
formed by the employing office>>, the con-
sequences that would flow from the failure to replace 
the ailing employee immediately, and the feasibility 
of filling the employee’s place promptly. 
‘‘(4) Regular repair and cleaning of equipment 
is not emergency work, even when necessary to pre-
vent fire or explosion; however, repairing equipment 
may be emergency work if the breakdown of or dam-
age to the equipment was caused by accident or 
carelessness that the employer could not reasonably 
anticipate. 
‘‘§ 541.707 Occasional tasks 
‘‘Occasional, infrequently recurring tasks that cannot 
practicably be performed by nonexempt employees, but are 
the means for an exempt employee to properly carry out 
exempt functions and responsibilities, are considered ex-
empt work. The following factors should be considered in 
determining whether such work is exempt work: Whether 
the same work is performed by any of the exempt employ-
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•HRES 1516 IH 
ee’s subordinates; practicability of delegating the work to 
a nonexempt employee; whether the exempt employee per-
forms the task frequently or occasionally; and existence 
of an industry practice for the exempt employee to per-
form the task. 
‘‘§ 541.708 Combination exemptions 
‘‘Employees who perform a combination of exempt 
duties as set forth in the regulations in this part for execu-
tive, administrative, professional, øoutside sales¿ and 
computer employees may qualify for exemption. Thus, for 
example, an employee whose primary duty involves a com-
bination of exempt administrative and exempt executive 
work may qualify for exemption. In other words, work that 
is exempt under one section of this part will not defeat 
the exemption under any other section. 
ø‘‘§ 541.709 Motion picture producing industry 
ø‘‘The requirement that the employee be paid ‘on a 
salary basis’ does not apply to an employee in the motion 
picture producing industry who is compensated at a base 
rate of at least $1,043 per week (exclusive of board, lodg-
ing, or other facilities). Thus, an employee in this industry 
who is otherwise exempt under subparts B, C, or D of 
this part, and who is employed at a base rate of at least 
the applicable current minimum amount a week is exempt 
if paid a proportionate amount (based on a week of not 
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•HRES 1516 IH 
more than 6 days) for any week in which the employee 
does not work a full workweek for any reason. Moreover, 
an otherwise exempt employee in this industry qualifies 
for exemption if the employee is employed at a daily rate 
under the following circumstances:¿ 
ø‘‘(a) The employee is in a job category for which 
a weekly base rate is not provided and the daily base rate 
would yield at least the minimum weekly amount if 6 days 
were worked; or¿ 
ø‘‘(b) The employee is in a job category having the 
minimum weekly base rate and the daily base rate is at 
least one-sixth of such weekly base rate.¿ 
‘‘§ 541.709 <<Reserved.>> 
‘‘§ 541.710 øEmployees of public agencies¿<<Effect of 
certain deductions on exempt employee 
pay>> 
‘‘(a) An employee øof a public agency¿ who otherwise 
meets the salary basis requirements of §541.602 shall not 
be disqualified from exemption under §541.100, 541.200, 
541.300 or 541.400 on the basis that such employee is 
paid according to a pay system established by statute, or-
dinance or regulation, or by a policy or practice estab-
lished pursuant to principles of public accountability, 
under which the employee accrues personal leave and sick 
leave and which requires the øpublic agency¿ employee’s 
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•HRES 1516 IH 
pay to be reduced or such employee to be placed on leave 
without pay for absences for personal reasons or because 
of illness or injury of less than one work-day when accrued 
leave is not used by an employee because: 
‘‘(1) Permission for its use has not been sought 
or has been sought and denied; 
‘‘(2) Accrued leave has been exhausted; or 
‘‘(3) The employee chooses to use leave without 
pay. 
‘‘(b) Deductions from the pay of an employee øof a 
public agency¿ for absences due to a budget-required fur-
lough shall not disqualify the employee from being paid 
on a salary basis except in the workweek in which the fur-
lough occurs and for which the employee’s pay is accord-
ingly reduced.’’. 
Æ 
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