The Big Three Exemptions: Key White-Collar Exemptions to Overtime Pay in the USA
Bill Martucci, head of Shook, Hardy & Bacon’s Employment, Litigation and Employment practice, explores the three major exemptions to the Fair Labor Standards Act’s premium pay obligations.
This podcast focuses on the three so-called white-collar exemptions to compliance with the Labor Standards Act’s overtime pay requirements: the executive exemption, the administrative exemption and the professional exemption.
The Supreme Court has made it clear that these exemptions are to be narrowly construed and their application is to be limited to those establishments and situations that plainly and unmistakably speak to these exemptions.
“If you qualify for one of these exemptions, you are exempt from the requirements of overtime.”
In addition to a salary requirement there are certain duties that must be met to qualify for the exemptions:
- The executive exemption requires that management be the primary duty – directing/guiding the work of employees and having the authority to hire and fire.
- The administrative exemption requires the performance of office or non-manual work directly related to the management or general business operations of the employer; it also includes the exercise of discretion and independent judgement with respect to matters of significance.
- The professional exemption requires either a primary duty that relies on advanced knowledge (for so-called learned professionals) or performance of work requiring invention, imagination, originality or a talent in a recognised field of artistic or creative endeavour (for so called creative professionals).
Shook, Hardy & Bacon
