Catalog of Sample Policies for Pennsylvania's Conservation Districts

Exempt vs. Non-Exempt Employees (Reference 1)
(Printing and Graphic Communications Association)

One of the issues, which raises its head every so often, concerns the matter of classifying jobs as exempt or non-exempt. The classification determines whether an employee is eligible for overtime pay after working 40 hours in a normal workweek. It is well established that management personnel and outside salespeople are exempt. What are tricky are the administrative and/or professional categories. Job titles don't tell the tale here, and neither does the fact that the employer regards the job as exempt or non-exempt. The controlling measure is actual job duties, and the Department of Labor will make that determination if an employee complains to them, or if they perform a routine audit.

So what determines if an administrative or professional job is exempt? For administrative positions, the primary duties must consist of office or non-production work directly related to management policies or the general operations of the employer. In addition, the work must include the exercise of discretion and independent judgment. If the person merely follows a set of prescribed routines set by someone else, they would not be exempt. For professional positions, the primary duties must consist of work requiring knowledge of an advanced type in a field of science or learning. The exercise of discretion and independent judgment is also required.

The key element in the above is "the exercise of discretion and independent judgment." The DOL guidelines here call for the person to make comparisons and evaluations of possible courses of action; to then decide between the possible courses of action; and to do this in an environment free from direct supervision the majority of the time.

Computer personnel could fall in the administrative or professional categories. As such, they present some of the same troubling questions as estimators or accountants. Do they simply perform keyboarding and routine processing within established computer programs? Then they're likely non-exempt. But a programmer/system analyst could well be exempt. And there are many "gray area" jobs in between, so careful analysis is required. The Department of Labor has also recognized that the computer industry has developed a somewhat peculiar wage model, where some highly skilled, non-degreed personnel are paid on an hourly basis. The DOL allows such people to be classified as exempt.

Finally, it should be recognized that method of payment does not by itself determine exempt or non-exempt status. It is true that almost all exempt positions are paid on a salary basis. However, don't assume that simply paying a person on a salaried basis will make them exempt. A payroll clerk being paid a salary is nevertheless almost always going to be classified as non-exempt. This is where the "discretion and independent judgment" criteria come into play.

Confusing? It certainly can be, but the good news is that many of these distinctions do not arise on a regular basis. If you've done a good job of classifying employees, and the jobs haven't changed, you're probably in good shape.