Exempt vs. Non-Exempt — What the Two Pay Labels Mean

The basic rule

Under the Fair Labor Standards Act (the FLSA), most employees in the United States must be paid at least the federal minimum wage for all hours worked, and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

Workers covered by these pay rules are commonly called non-exempt — they are not exempt (excused) from the rules.

What “exempt” means

Exempt means exempt from both the minimum wage and the overtime pay rules.

Section 13(a)(1) of the FLSA gives this exemption only to employees employed as bona fide executive, administrative, professional, and outside sales employees. Certain computer employees are also exempt under Sections 13(a)(1) and 13(a)(17).

Two tests: pay and duties

To qualify for the exemption, an employee generally must pass both a pay test and duties tests:

Be paid on a salary basis at not less than $684 per week, and
Have job duties that meet all of the Department’s requirements.

Employers may use nondiscretionary bonuses and incentive payments (including commissions), paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level.

A title or a salary alone is not enough

Job titles do not determine exempt status.

Being paid a salary by itself does not make a worker exempt.

The groups and what their duties must be

Each group below has its own duties test. All of the points listed for a group must be met.

Executive employees

Pay: salary basis at not less than $684 per week.

Primary duty is managing the business, or managing a customarily recognized department or subdivision of it.
Customarily and regularly directs the work of at least two or more other full-time employees or their equivalent.
Has the authority to hire or fire other employees, or their suggestions on hiring, firing, advancement, promotion, or other change of status are given particular weight.

Administrative employees

Pay: salary or fee basis at not less than $684 per week.

Primary duty is office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.
The primary duty includes the exercise of discretion and independent judgment about matters of significance.

Learned professional employees

Pay: salary or fee basis at not less than $684 per week.

Primary duty is work requiring advanced knowledge — work that is mainly intellectual and consistently requires discretion and judgment.
The advanced knowledge is in a field of science or learning.
The advanced knowledge is customarily acquired by a prolonged course of specialized intellectual instruction.

Creative professional employees

Pay: salary or fee basis at not less than $684 per week.

Primary duty is work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

Computer employees

Pay: salary or fee basis at not less than $684 per week, or, if paid by the hour, at not less than $27.63 an hour.

Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field.
Primary duty is work such as applying systems analysis techniques, or designing, developing, documenting, analyzing, creating, testing, or modifying computer systems or programs (including work on programs related to machine operating systems).

Outside sales employees

Pay: the fact sheet sets no salary requirement for this group.

Primary duty is making sales, or obtaining orders or contracts for services or for the use of facilities that a client or customer pays for.
The employee is customarily and regularly engaged away from the employer’s place or places of business.

Highly compensated employees

Employees doing office or non-manual work who are paid total annual compensation of $107,432 or more — which must include at least $684 per week paid on a salary or fee basis — are exempt if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee.

Jobs that are never exempt under these rules

No matter how highly paid, the exemption does not apply to manual laborers and other “blue-collar” workers who do work involving repetitive operations with their hands, physical skill, and energy. The fact sheet names:

Carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers, and laborers.

Also never exempt under these rules, regardless of rank or pay level:

Police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers, and similar first responders doing that kind of work.

Federal rules are a floor, not a ceiling

The FLSA sets minimum standards. State or local law can be stronger, and when state law differs from the federal FLSA, an employer must comply with the standard most protective of employees.

Collective bargaining agreements cannot waive or reduce FLSA protections.

This page cannot tell you which label fits your job.

This page only explains the labels in general words. Only the full rules — and, if there is a dispute, the Department of Labor or a court — can decide a real case.

If you have a question about a real job, call the helpline listed below.

Questions? Call the helpline

U.S. Department of Labor, Wage and Hour Division — toll-free helpline:

1-866-4USWAGE (1-866-487-9243)

Available 8 a.m. to 5 p.m. in your time zone.

Source

U.S. Department of Labor, Wage and Hour Division — Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA), 29 C.F.R. Part 541.

Checked November 2026.

General information only — not legal advice