Not All Exempt Employees Are Affected by the New Minimum Salary Rule

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Franczek P.C.

The U.S. Department of Labor recently published new final regulations that increase the minimum salary level for most employees to be considered exempt under the executive, administrative, and professional exemptions to the Fair Labor Standards Act. While these new rules could affect some 4 million workers, not all exempt employees are subject to the minimum salary requirement.

Most significantly, the professional exemption for teachers does not have any salary basis or salary level requirement. A teacher, for purposes of the FLSA, is an employee whose primary duty is teaching, tutoring, instructing, or lecturing to impart knowledge, performed as an employee of an educational establishment. The teaching exemption may apply to some coaches and other professionals whose main job is teaching, even if they do not hold a teaching certificate or license. However, it does not apply to paraprofessionals who work under the supervision of a teacher, nor does it apply to an employee who may be a certified teacher but who is in a non-teaching position.

Like teachers, lawyers and physicians – that is, employees who hold a valid license or certificate permitting the practice of law or medicine and who are actually engaged in the practice of law or medicine – are exempt without regard to whether they are paid on a salary basis or receive the new minimum salary specified in the regulations. A medical intern or resident who holds the requisite academic degree for the general practice of medicine is also exempt without regard to salary.

Educational administrators – that is, employees who perform administrative functions directly related to academic instruction or training in an educational establishment – can also be considered exempt. Educational administrators must be paid on a salary basis, but the minimum salary for an educational administrator can be either the minimum salary specified in the regulations, or a salary “at least equal to the entrance salary for teachers in the same educational establishment.” Academic administrators typically include superintendents, principals, vice- or assistant-principals, department chairs, and the like. However, this category does not apply to employees with jobs not directly related to academic instruction, such as school business officers. Those employees can be exempt under the more general administrative exemption, but must be paid at least the minimum salary specified in the regulations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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