Special exemptions: Executives, outside salespersons, and IT staff
What is proper pay for these positions?
In addition to exemptions to the FLSA overtime pay requirements for professional positions and administrative staff, the FLSA also allows exemptions for executive leadership, outside salespersons, and computer employees. The minimum pay for salaried employees of $47,476.00 ($455 per week) applies to Executive leadership and information technology staff of architectural firms as a threshold determination as to whether such employees can be considered as exempt. The salary threshold requirement is irrelevant to outside salespersons. The following briefly describes the additional requirements each type of employee must meet to satisfy the respective exemptions:
- Executives are likely to hold titles of principal, partner, director and the like and will typically be treated as exempt employees at architectural firms. Nevertheless, to be safe, firms should understand that even executives must meet the FLSA requirements. In addition to the salary requirement, these individuals must have a primary duty to manage the firm or a department within the firm, direct two or more employees, and have the ability to recommend hiring, advancement, promotion, termination, or other change in status of employees. Registered architect leaders of firms will likely qualify for both executive and professional exemptions.
- Outside salespersons, as defined by the FLSA, is an unlikely employee classification for employees of an architecture firm. An outside salesperson’s primary duty must be making sales, i.e. contracts for services your firm may provide and is regularly and customarily engaged away from the firm’s place of business.
- The computer employee exemption is primarily for employees engaged in programming or otherwise developing computer systems and software. To qualify, in addition to meeting the salary threshold, the employee’s primary duties would include techniques of systems analysis, user consultation, specification/selection of hardware, software or system specifications; all manner of specific tasks related to systems, programs, prototypes, modification and operation of computers. An IT technician responsible for “installing and upgrading hardware and software on workstations, configuring desktops, checking cables, replacing parts, and troubleshooting Windows problems” would therefore not qualify for the Computer Employee Exemption Martin v. Indiana Michigan Power Co. (6th Cir. 2004).
To best assure compliance with applicable labor law, there a few necessary steps your firm should take, no matter what size of your practice. Have a clear set of job descriptions for these particular roles, if in your firm and if you have a question, consult the links below and speak to an attorney knowledgeable in labor law.
Additionally, below are links to a number of resources that firms can utilize in determining employee compensation and exempt status:
- General Guidance from DOL
- DOL Fact Sheet 17E - Exemption for Computer Employees Under the FLSA
- DOL Fact Sheet 17B - Exemption for Executives Under the FLSA
- DOL Fact Sheet 17F - Exemption for Outside Salespersons Under the FLSA
- AIA Salary Calculator (including job descriptions)
The American Institute of Architects has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice.