What is a Duties Test?

The duties test is a key component used to determine whether an employee qualifies for an exemption from overtime pay under the Fair Labor Standards Act (FLSA).

This test examines the specific job duties and responsibilities of an employee to establish if they fall under one of the FLSA exemptions, such as the executive, administrative, or professional exemptions.

Primary Duty & Exempt Status

Primary Duty

The primary duty refers to the principal, main, major, or most important duty that the employee performs. Determining an employee’s primary duty is crucial for applying the duties test accurately. This assessment helps in identifying whether an employee is exempt or non-exempt under the FLSA.

Exempt Status

Exempt status is granted to employees who meet specific criteria related to their job duties, salary basis, and salary level. Exempt employees are not entitled to overtime pay, whereas non-exempt employees must receive overtime pay for hours worked beyond the standard 40-hour workweek.

Key Exemptions Under the FLSA

Executive Exemption

To qualify for the executive exemption, an employee’s primary duty must involve managing the enterprise or a recognized department or subdivision.

The employee must also regularly direct the work of at least two or more other full-time employees or their equivalent and have the authority to hire or fire other employees. Typical job titles might include executive employee, department manager, or operations director.

Administrative Exemption

Employees eligible for the administrative exemption must perform office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers. Their primary duty must include exercising discretion and independent judgment on matters of significance. Job titles under this exemption often include administrative assistant, office manager, and business analyst.

Professional Exemption

The professional exemption applies to employees whose primary duty involves performing work that requires advanced knowledge in a field of science or learning. This exemption often covers jobs such as doctors, lawyers, and teachers. The work must be predominantly intellectual and require consistent exercise of discretion and judgment.

Creative Professional Exemption

Employees who perform work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor may qualify for this exemption. Examples include actors, musicians, and writers.

Computer Employees Exemption

This exemption applies to computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field. Their primary duty must involve system analysis, programming, software engineering, or other related tasks.

Outside Sales Exemption

To qualify, an employee’s primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities. The employee must be regularly engaged away from the employer’s place of business.

Salary Basis & Salary Level Tests

Salary Basis Test

Employees must be paid on a salary basis, meaning they receive a fixed salary that is not subject to reduction based on the quality or quantity of work performed. This ensures that employees have a guaranteed minimum amount of pay each pay period.

Salary Level Test

The salary level test requires that employees earn at least a minimum specified amount to qualify for exempt status. The Department of Labor (DOL) sets this threshold, and it is subject to periodic updates. The current salary threshold must be met in addition to the duties test for exemption.

Other Important Considerations

Highly Compensated Employees

Employees who earn above a certain total annual compensation threshold and perform at least one of the duties of an exempt executive, administrative, or professional employee may be classified as exempt under the highly compensated employees category.

Non-Exempt Employees

Non-exempt employees are entitled to overtime pay for hours worked beyond the standard 40-hour workweek. This category typically includes employees who do not meet the duties test or salary requirements for exemption.

Independent Judgment

Many exemptions require that employees exercise discretion and independent judgment in their roles. This means they must make decisions on significant matters rather than simply following established procedures.

Application in Human Resources

Human resources professionals must apply the duties test accurately to classify employees correctly.

Misclassification can lead to legal and financial consequences, including back pay for overtime. Understanding the specific requirements of each exemption category helps ensure compliance with the FLSA.

3 Practical Examples

Software Engineer

A software engineer may qualify for the computer employee exemption if their primary duty involves system analysis, programming, or software engineering.

Administrative Employee

An employee performing tasks related to general business operations and exercising independent judgment on significant matters might qualify for the administrative exemption.

Sales Representative

An outside sales representative who regularly works away from the employer’s place of business and makes sales could be exempt under the outside sales exemption.

Monitoring and Compliance

Employers should regularly review job duties and classifications to ensure compliance with the FLSA. This includes conducting audits, updating job descriptions, and providing training for managers and HR personnel. Proper documentation and adherence to the duties test criteria help maintain compliance and protect the organization from potential legal issues.

Additional Exemption Requirements

Exemption requirements also include adhering to the minimum salary and fee basis criteria. For instance, professional employees must often meet a minimum salary level, while some roles, such as those in outside sales, may be paid on a fee basis. Compliance with these financial thresholds, along with the primary duty assessment, determines exemption status.

The Role of Job Titles

Job titles alone do not determine exemption status. The actual job duties and responsibilities must align with the criteria set forth in the FLSA duties test. Employers should ensure that job titles accurately reflect the duties performed to avoid misclassification.

White-Collar Exemptions

The FLSA includes white-collar exemptions for executive, administrative, and professional employees. These exemptions are designed to cover employees in managerial or specialized roles that typically require higher education or expertise.

Protections and Overtime Rule

The FLSA provides protections for non-exempt employees by ensuring they receive overtime pay. The overtime rule mandates that eligible employees receive one and a half times their regular pay rate for hours worked beyond 40 in a workweek. This rule is fundamental to safeguarding workers’ rights and ensuring fair compensation.

Disclaimer

This article provides general information on the duties test and FLSA exemptions and is not a substitute for professional legal advice. Employers should consult with legal professionals to ensure compliance with all relevant laws and regulations. Employees seeking detailed information or guidance on their classification should refer to resources provided by the U.S. Department of Labor (DOL) and other reputable sources.

Need Help With Payroll?
Taxes filed for you, automatically.

Let Buddy Punch handle your payroll

Run payroll, pay employees & contractors, all in a few clicks.

Quickly pay your team, no matter where they are,