Reference Number: 
CTAS-137

These exemptions are sometimes called the “white collar” or “Section 541” exemptions, and are governed by the federal regulations found at 29 C.F.R. part 541. These regulations contain detailed requirements for the application of the exemptions. On April 23, 2004, the DOL filed its final regulations amending the regulations to revise the requirements for these exemptions. These regulations, known as the "Fair Pay" rules, became effective on August 23, 2004. The DOL has a Web site that is dedicated to explaining the regulations. Employers should thoroughly review all of their wage and hour practices and make adjustments to ensure compliance with the rules.

The employer has the burden of proving that a particular exemption applies to a particular employee and, therefore, the employer takes the exemption at his or her peril. Also, even though executive, administrative, and professional employees are specifically excluded from the provisions of the FLSA with regard to minimum wage and overtime, these employees are not exempt from the equal pay provisions and some of the recordkeeping provisions.

In order to qualify for one of these exemptions, an employee must meet certain tests regarding minimum compensation, job duties and responsibilities, and the employee must be paid on a “salary basis.” Under the old regulations, each of the white collar exemptions had a “Short Test” and a “Long Test” but these tests have been combined into a single test for each exemption. All of the white-collar exemptions require employees to be paid on a “salary basis” and their “primary duty” must be the performance of exempt work that varies by exemption. An employee who satisfies the test for a white-collar exemption is exempt from the minimum wage and overtime requirements of the FLSA.