How to Classify Employees–Exempt or Not

Short Test

Long Test

o Primary Duty: management (50%)

o Direct two or more employees

o Salary: $250/week

(Other criteria assumed)

The primary duty is management. These people must direct the work of at least two people, have hiring and firing authority, and use discretionary powers. No more than 20 percent (40 percent if retail) of their workweek can be spent in nonexempt work.

o Primary Duty: office (non-manual)

o Duties related to management

o Exercise of discretion

o Salary: $250/week

(Other criteria assumed)

The primary duty is either: one, performing office work related to management policies or general business practices or, two, the administration of a school system. Also included are staff employees who perform special assignments, like purchasing agents or auditors. One test is the use of independent judgment and discretion. No more than 20 percent (40 percent if retail) of their workweek can be spent in nonexempt work.

o Sell away from employer’s business

o No more than 20% non-selling hours

o No salary test

(Other criteria assumed)

Outside salespeople are exempt if they meet two requirements: one, they are customarily engaged in selling or getting orders for the company’s products or services, and, two, they spend less than 20 percent of their workweek in non-sales activities. There is no minimum salary requirement.

o Primary Duty: work requiring knowledge through prolonged course of study

o Exercise of discretion

o Salary: $250/week

(Other criteria assumed)

The primary work requires either one, advanced knowledge customarily acquired by specialized study or, two, originality and creativity. They must use discretion and independent judgment. Their work must be intellectual and varied, not standardized. No more than 20 percent of their workweek can be spent in nonexempt tasks.