Revised April 2021

Original Publication: April 16, 2018

Exempt and nonexempt, hourly, salaried, and salaried nonexempt are definitions that most of us know and currently use to classify the positions in our organizations.  We know that we must classify individuals in an exempt or nonexempt (overtime eligible) position for payroll, overtime and reporting purposes.  There are numerous definitions to define exempt level positions under the current FLSA (federal) regulations.  Remember that the salary threshold in New York State varies for executive and administrative professionals, when comparing with the federal law.  As leaders, we need to ensure our classifications for each position within our organizations are accurate and our workforce is paid correctly for work performed and hours worked.

Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)

The 6 exempt level definitions under the FLSA:

  1. The Executive Exemption: Primary duties include managing the enterprise, directing the work of at least two or more full-time employees and has the authority to hire and fire employees.  The link(s) goes into specific duties tests on the exemptions.  NY State Law
  2. The Administrative Exemption: Primary duties must be the performance of office or non-manual work related to the management of the business and exercising discretion and independent judgement with respect to matters of significance.  NY State Law
  3. The Learned Professional Exemption: Primary duties must be the performance of work requiring advanced knowledge, which is predominantly intellectual in character and requires discretion and judgement.
  4. Computer Employee Exemption: Primary duties consist of the application of systems analysis techniques, design development, documentation, analysis, creation, modification of computer systems and designing, testing or modifying computer programs.  This exemption is complex, ensure you read through the FLSA definition prior to deciding and thoroughly understand the duties test. 
  5. The Outside Sales Exemption:  Primary duties must include making sales, obtaining orders or contracts.  The employee must be regularly engaged away from the employer’s place of business. 
  6. The Highly Compensated Employees Exemption: Perform office or non-manual work and paid total annual compensation of $100,000 or more.  They regularly perform at least one of the duties of an exempt executive, administrative or learned professional identified in the standard tests of exemption.
  7. Other Definitions:                   Blue Collar Worker Police Officers, Fire Fighters and First Responders

FLSA Exempt Level at the Federal Level

“There are three main criteria that must be met for a position to qualify for a white-collar  exemption:

  • Payment on a salary basis, with some exceptions;
  • Payment of a minimum salary, currently $684 per week ($35,568 annually), also with some exceptions; and
  • primary duty test specific to each type of exemption listed above.

Additionally, a highly compensated employee making $107,432 or more annually who performs at least one of the duties of an exempt position described above may be classified as exempt from overtime. Some states also have their own criteria for exemptions that must be complied with.” (SHRM)

New York State Exempt Administrative and Executive Minimum Salaries
The minimum salary for exempt executive and administrative employees in New York will increase as follows:

  • Nassau, Suffolk, and Westchester counties: $1,050 per week, which equals $54,600 per year.
  • The rest of the state outside New York City: $937.50 per week, which equals $48,750 per year.

(The minimum in New York City previously increased to $1,125 per week.)

Ensure all positions are classified correctly, exempt vs. non-exempt.  Just because someone has a manager or director title does not mean it is exempt level work.  Reviewing this information annually will ensure accurate and legal job classifications.  I am happy to work with any organization classifying positions.

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