HR Mavericks

Eddy’s HR Mavericks Encyclopedia

Professional Exemption
How will your employees get paid? Often, businesses choose to pay an employee hourly or salary depending on which is more convenient for them. However, there’s more to it than that! This article explains what exempt means and the laws and regulations that an employer should be aware of.

What Is Professional Exemption?

Professional exemption is when an employee is not entitled to receive overtime pay if they work more than 40 hours a week. Those who qualify for professional exemption are most commonly salary employees, but can also be classified as hourly. Professional exempt work is generally intellectual, requires higher levels of education, and needs discretion and judgment.

Why Is Professional Exemption Important?

First and foremost, professional exemption guides an employer on how an employee should be classified and paid according to the Fair Labor Standards Act (FLSA). Here are some other reasons why professional exemption status is important.
  • Legal compliance. Classifying an employee as exempt if they meet the qualifications is required by the FLSA. It is important that the employee’s job duties are clearly defined so they can clearly be classified as exempt or non-exempt.
  • Pay expectations. Designating someone as a professional exempt employee clearly defines how they will be paid. As a professional exempt employee, they are not eligible for overtime and must be paid at least $23,600 per year. In most cases, employees making more than $100,000 per year are exempt.
  • Job expectations. As part of the professional exemption status, there are certain job expectations. The traditional “learned profession” might fall into this, including careers such as accountant or lawyer. A formal education of some kind is typically found with this exemption status. These types of jobs usually call for discretion and judgment from the employee as well. These guidelines can help employees understand what to expect when working a professional exempt job.

What Employees Are Considered “Professional”?

Within the professional exemption, there are a few types of jobs that fall underneath. Here are some of those jobs.

Learned Professions

These are professionals with very specialized training in fields such as science or learning. This could include law, medicine, technology, accounting, engineering, pharmacy, teaching or any other occupations that are distinguishable from mechanical arts.

Creative Professionals

These jobs are primarily associated with performance work that includes invention, imagination, originality or talent in fields that require artistic or creative endeavor. This could include actors, musicians, movie directors or composers. This can have a little more gray area, as it depends on how much invention, imagination, originality, or talent is used by the employee. Journalists might also fall under this exemption’s gray area, as they are only professional exempt if their job requires more than collecting, organizing and recording information that is already publicly known.

Advanced Knowledge Required

Some form of advanced knowledge is usually required in a professional exempt role. What that advanced knowledge looks like may vary from position to position, but the work usually requires consistent exercise of discretion and judgment that can come through education. Education that is beyond high school might be considered advanced knowledge. Typically, the advanced knowledge is obtained through a course or courses of specialized intellectual instruction. This advanced knowledge is used to analyze, interpret or make determinations from information that is provided in the job.

How Does Professional Exemption Work?

When determining whether an employee is professionally exempt, there are a few tests that must be done or questions asked. Here are those tests.

Wages Earned

For an employee to be considered a professionally exempt employee, they need to be paid a minimum of $684 per week. Most professional exempt employees are paid that amount as a salaried employee, but other forms of payment (hourly, piece rate, contract) would also suffice as long as the minimum is met.

Primary Duties

What an employee does as part of their job creates the most gray area when determining whether an employee is a professional exempt employee or not. Professional exempt employees’ work should require advanced knowledge, which is typically defined as intellectual, and includes work that requires discretion and judgment.

Advanced Knowledge

The last test measures the employee’s knowledge and expertise. Advanced knowledge must be in a field of science or learning. The advanced knowledge should also be acquired through prolonged courses or specialized intellectual instruction.

Examples of Professional Exemption

What goes into being a professionally exempt employee has already been laid out in detail. Here are some examples of professions that fall within the professional exemption.

Medical Field

This could include doctors, surgeons, physicians assistants or nurses. All of these positions require advanced knowledge and judgment. This advanced knowledge is obtained through years of medical school and is in a field of science.

Accounting

Any kind of accountant should be considered a professionally exempt employee. This likely wouldn’t include someone who is doing bookkeeping for the business (so could potentially depend on their knowledge and job duties). Most accountants receive advanced degrees such as their bachelor’s or master’s to have advanced knowledge in accounting. This advanced knowledge could be obtained through other ways such as work experience or other intellectual instruction. Accounting is also considered a field of learning.

Law

Any kind of lawyer or judge should be considered a professionally exempt employee. Through the years of law school in a field of learning, they obtain advanced knowledge. This advanced knowledge could range anywhere from family law to employment law. This advanced knowledge is shown by employees receiving their “appropriate” academic degree. Similar to accountants, a degree is not required to be classified as a professionally exempt employee, as the advanced knowledge can be obtained through work experience or other intellectual instruction. However, in the case of law, high-level education is the most common way it is obtained.
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Tanner Pierce, PHR

Tanner Pierce, PHR

Tanner has over 4 years of HR professional experience in various fields of HR. He has experience in hiring, recruiting, employment law, unemployment, onboarding, outboarding, and training to name a few. Most of his experience comes from working in the Professional Employer and Staffing Industries. He has a passion for putting people in the best position to succeed and really tries to understand the different backgrounds people come from.
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Frequently asked questions
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