[Congressional Record Volume 169, Number 39 (Wednesday, March 1, 2023)]
[House]
[Pages H1008-H1017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                NOTICE OF ISSUANCE OF FINAL REGULATIONS

                                 ______
                                 
                                                February 28, 2023.
     Re Notice of Issuance of Final Regulations Pursuant to the 
         Congressional Accountability Act.

     Hon. Kevin McCarthy,
     Office of the Speaker of the House of Representatives, 
         Washington, DC.
       Dear Mr. Speaker: On December 14, 2022, the House of 
     Representatives passed House Resolution 1516, thereby 
     approving the regulations adopted by the Board of Directors 
     of the Office of Congressional Workplace Rights that were 
     promulgated under section 203(c)(1) of the Congressional 
     Accountability Act (CAA), 2 U.S.C. Sec. 1313(c)(1), to the 
     extent such regulations are consistent with the provisions of 
     the CAA. The approved regulations govern minimum wage, 
     overtime, and exemptions thereto for employees in the House.
       Section 304 of the CAA, (2 U.S.C. Sec. 1384) provides that, 
     after congressional approval of substantive regulations, the 
     Board shall submit the regulations to the Speaker of the 
     House of Representatives and the President pro tempore of the 
     Senate. Accordingly, on behalf of the Board of Directors of 
     the Office of Congressional Workplace Rights, I am 
     transmitting the enclosed Notice of Issuance of Final 
     Regulations, together with a copy of the final regulations.
       Pursuant to section 304, the Board also requests that the 
     enclosed notice be published in the Congressional Record on 
     the first day on which both the House and the Senate are in 
     session following this transmittal.
           Sincerely,

                                       Barbara Childs Wallace,

                                  Chair of the Board of Directors,
                         Office of Congressional Workplace Rights.
       Attachment.

                NOTICE OF ISSUANCE OF FINAL REGULATIONS

       The Congressional Accountability Act of 1995 (CAA) was 
     enacted into law on January 23, 1995. In general, the CAA 
     applies the rights and protections of 14 federal labor and 
     employment law statutes to covered congressional employees 
     and employing offices. Section 203 of the CAA addresses the 
     application of (a)(1) and (d) of section 6, section 7, and 
     section 12(c) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 206 (a)(1) and (d), 207, 212(c)) to covered employees.
       Section 203(c)(1) of the Act requires the Board of 
     Directors of the Office of Congressional Workplace Rights 
     (Board) to issue regulations to implement section 203. 
     Section 203(c)(3) of the CAA further requires that the Board 
     issue regulations for covered employees whose work schedules 
     directly depend on the schedule of the House of 
     Representatives or the Senate that shall be comparable to the 
     provisions in the Fair Labor Standards Act of 1938 [29 U.S.C. 
     201 et seq.] that apply to employees who have irregular work 
     schedules.
       The Board, pursuant to section 203(c)(1), adopted and 
     submitted the Regulations Relating to the House of 
     Representatives and Its Employing Offices for publication in 
     the Congressional Record. Publication was effectuated on 
     September 28, 2022. The Regulations are attached to this 
     notice.
       Pursuant to section 304 of the CAA, 2 U.S.C. Sec. 1384, 
     approved regulations become effective not less than 60 days 
     after the date on which they are published in the 
     Congressional Record. Although the Board has the authority to 
     provide for an earlier effective date for good cause found, 
     the Board does not find good cause to provide for an earlier 
     effective date for these regulations. Therefore, these 
     regulations will become effective 60 days after the date on 
     which they are published in the Congressional Record.
       Accordingly, having now been approved by the House, the 
     Board submits its regulations to the Speaker of the House of 
     Representatives for publication in the Congressional Record.

                                       Barbara Childs Wallace,

                                  Chair of the Board of Directors,
                         Office of Congressional Workplace Rights.

                H SERIES OVERTIME EXEMPTION REGULATIONS

    Part 541--Defining and Delimiting the Exemptions for Executive, 
          Administrative, Professional, and Computer Employees

                     SUBPART A--GENERAL REGULATIONS

                     SUBPART B--EXECUTIVE EMPLOYEES

[[Page H1009]]



                  SUBPART C--ADMINISTRATIVE EMPLOYEES

                   SUBPART D--PROFESSIONAL EMPLOYEES

                     SUBPART E--COMPUTER EMPLOYEES

                          SUBPART F--Reserved

                     SUBPART G--SALARY REQUIREMENTS

          SUBPART H--DEFINITIONS AND MISCELLANEOUS PROVISIONS

         SUBPART A--GENERAL REGULATIONS (Sec. Sec. 541.0-541.4)

       (a) Section 13(a)(1) of the Fair Labor Standards Act, as 
     amended, provides an exemption from the Act's minimum wage 
     and overtime requirements for any employee employed in a bona 
     fide executive, administrative, or professional capacity 
     (including any employee employed in the capacity of academic 
     administrative personnel or teacher in elementary or 
     secondary schools) and applies to covered employees by virtue 
     of section 225(e)(1) of the CAA, as amended, 2 U.S.C. 
     1361(e)(1). Section 13(a)(17) of the Act provides an 
     exemption from the minimum wage and overtime requirements for 
     computer systems analysts, computer programmers, software 
     engineers, and other similarly skilled computer employees and 
     applies to covered employees by virtue of section 225(e)(1) 
     of the CAA, as amended, 2 U.S.C. 1361(e)(1).
       (b) The requirements for these exemptions are contained in 
     this part as follows: executive employees, subpart B; 
     administrative employees, subpart C; professional employees, 
     subpart D; computer employees, subpart E. Subpart G contains 
     regulations regarding salary requirements applicable to most 
     of the exemptions, including salary levels and the salary 
     basis test. Subpart G also contains a provision for exempting 
     certain highly compensated employees. Subpart H contains 
     definitions and other miscellaneous provisions applicable to 
     all or several of the exemptions.
       (c) Effective July 1, 1972, the Fair Labor Standards Act 
     was amended to include within the protection of the equal pay 
     provisions those employees exempt from the minimum wage and 
     overtime pay provisions as bona fide executive, 
     administrative, and professional employees (including any 
     employee employed in the capacity of academic administrative 
     personnel or teacher in elementary or secondary schools). The 
     equal pay provisions in section 6(d) of the Fair Labor 
     Standards Act are administered and enforced by the Office of 
     Congressional Workplace Rights.
       Act means the Fair Labor Standards Act of 1938, as amended. 
     CAA means Congressional Accountability Act of 1995, as 
     amended. Office means the Office of Congressional Workplace 
     Rights. Employee means a ``covered employee'' as defined in 
     section 101(a)(3) through (a)(8) of the CAA, 2 U.S.C. 
     1301(a)(3) through (a)(8), but not an ``intern'' as defined 
     in section 203(a)(2) of the CAA, 2 U.S.C. 1313(a)(2). 
     Employer, company, business, or enterprise each mean an 
     ``employing office'' as defined in section 101(a)(9) of the 
     CAA, 2 U.S.C. 1301(a)(9).
       A job title alone is insufficient to establish the exempt 
     status of an employee. The exempt or nonexempt status of any 
     particular employee must be determined on the basis of 
     whether the employee's salary and duties meet the 
     requirements of the regulations in this part.
       (a) The section 13(a)(1) exemptions and the regulations in 
     this part do not apply to manual laborers or other ``blue 
     collar'' workers who perform work involving repetitive 
     operations with their hands, physical skill and energy. Such 
     nonexempt ``blue collar'' employees gain the skills and 
     knowledge required for performance of their routine manual 
     and physical work through apprenticeships and on-the-job 
     training, not through the prolonged course of specialized 
     intellectual instruction required for exempt learned 
     professional employees such as medical doctors, architects 
     and archeologists. Thus, for example, non-management 
     production-line employees and non-management employees in 
     maintenance, construction and similar occupations such as 
     carpenters, electricians, mechanics, plumbers, iron workers, 
     craftsmen, operating engineers, longshoremen, construction 
     workers and laborers are entitled to minimum wage and 
     overtime premium pay under the Fair Labor Standards Act, and 
     are not exempt under the regulations in this part no matter 
     how highly paid they might be.
       (b)(1) The section 13(a)(1) exemptions and the regulations 
     in this part also do not apply to police officers, 
     detectives, investigators, inspectors, park rangers, fire 
     fighters, paramedics, emergency medical technicians, 
     ambulance personnel, rescue workers, hazardous materials 
     workers and similar employees, regardless of rank or pay 
     level, who perform work such as preventing, controlling or 
     extinguishing fires of any type; rescuing fire, crime or 
     accident victims; preventing or detecting crimes; conducting 
     investigations or inspections for violations of law; 
     performing surveillance; pursuing, restraining and 
     apprehending suspects; detaining or supervising suspected and 
     convicted criminals, including those on probation or parole; 
     interviewing witnesses; interrogating and fingerprinting 
     suspects; preparing investigative reports; or other similar 
     work.
       (2) Such employees do not qualify as exempt executive 
     employees because their primary duty is not management of the 
     employing office in which the employee is employed or a 
     customarily recognized department or subdivision thereof as 
     required under Sec. 541.100. Thus, for example, a police 
     officer or fire fighter whose primary duty is to investigate 
     crimes or fight fires is not exempt under section 13(a)(1) of 
     the Act merely because the police officer or fire fighter 
     also directs the work of other employees in the conduct of an 
     investigation or fighting a fire.
       (3) Such employees do not qualify as exempt administrative 
     employees because their primary duty is not the performance 
     of work directly related to the management or general 
     business operations of the employer or the employer's 
     customers, constituents or stakeholders as required under 
     Sec. 541.200.
       (4) Such employees do not qualify as exempt professionals 
     because their primary duty is not the performance of work 
     requiring knowledge of an advanced type in a field of science 
     or learning customarily acquired by a prolonged course of 
     specialized intellectual instruction or the performance of 
     work requiring invention, imagination, originality or talent 
     in a recognized field of artistic or creative endeavor as 
     required under Sec. 541.300. Although some police officers, 
     fire fighters, paramedics, emergency medical technicians and 
     similar employees have college degrees, a specialized 
     academic degree is not a standard prerequisite for employment 
     in such occupations.
       The Fair Labor Standards Act provides minimum standards 
     that may be exceeded, but cannot be waived or reduced. 
     Employers must comply, for example, with any Federal laws, 
     regulations or ordinances establishing a higher minimum wage 
     or lower maximum workweek than those established under the 
     Act. Similarly, employers, on their own initiative or under a 
     collective bargaining agreement with a labor union, are not 
     precluded by the Act from providing a wage higher than the 
     statutory minimum, a shorter workweek than the statutory 
     maximum, or a higher overtime premium (double time, for 
     example) than provided by the Act. While collective 
     bargaining agreements cannot waive or reduce the Act's 
     protections, nothing in the Act or the regulations in this 
     part relieves employers from their contractual obligations 
     under collective bargaining agreements.

       SUBPART B--EXECUTIVE EMPLOYEES (Sec. Sec. 541.100-541.106)

       (a) The term ``employee employed in a bona fide executive 
     capacity'' in section 13(a)(1) of the Act shall mean any 
     employee:
       (1) Compensated on a salary basis pursuant to Sec. 541.600 
     at a rate of not less than $684 per week, exclusive of board, 
     lodging or other facilities;
       (2) Whose primary duty is management of the employing 
     office in which the employee is employed or of a customarily 
     recognized department or subdivision thereof;
       (3) Who customarily and regularly directs the work of two 
     or more other employees; and
       (4) Who has the authority to hire or fire other employees 
     or whose suggestions and recommendations as to the hiring, 
     firing, advancement, promotion or any other change of status 
     of other employees are given particular weight.
       (b) The phrase ``salary basis'' is defined at Sec. 541.602; 
     ``board, lodging or other facilities''

[[Page H1010]]

     is defined at Sec. 541.606; ``primary duty'' is defined at 
     Sec. 541.700; and ``customarily and regularly'' is defined at 
     Sec. 541.701.
       Generally, ``management'' includes, but is not limited to, 
     activities such as interviewing, selecting, and training of 
     employees; setting and adjusting their rates of pay and hours 
     of work; directing the work of employees; maintaining 
     production or sales records for use in supervision or 
     control; appraising employees' productivity and efficiency 
     for the purpose of recommending promotions or other changes 
     in status; handling employee complaints and grievances; 
     disciplining employees; planning the work; determining the 
     techniques to be used; apportioning the work among the 
     employees; determining the type of materials, supplies, 
     machinery, equipment or tools to be used or merchandise to be 
     bought, stocked and sold; controlling the flow and 
     distribution of materials or merchandise and supplies; 
     providing for the safety and security of the employees or the 
     property; planning and controlling the budget; and monitoring 
     or implementing legal compliance measures.
       (a) The phrase ``a customarily recognized department or 
     subdivision'' is intended to distinguish between a mere 
     collection of employees assigned from time to time to a 
     specific job or series of jobs and a unit with permanent 
     status and function. A customarily recognized department or 
     subdivision must have a permanent status and a continuing 
     function. For example, a large employer's human resources 
     department might have subdivisions for labor relations, 
     pensions and other benefits, equal employment opportunity, 
     and personnel management, each of which has a permanent 
     status and function.
       (b) When an employing office has more than one location, 
     the employee in charge of each location may be considered in 
     charge of a recognized subdivision of the employing office.
       (c) A recognized department or subdivision need not be 
     physically within the employer's establishment and may move 
     from place to place. The mere fact that the employee works in 
     more than one location does not invalidate the exemption if 
     other factors show that the employee is actually in charge of 
     a recognized unit with a continuing function in the 
     organization.
       (d) Continuity of the same subordinate personnel is not 
     essential to the existence of a recognized unit with a 
     continuing function. An otherwise exempt employee will not 
     lose the exemption merely because the employee draws and 
     supervises workers from a pool or supervises a team of 
     workers drawn from other recognized units, if other factors 
     are present that indicate that the employee is in charge of a 
     recognized unit with a continuing function.
       (a) To qualify as an exempt executive under Sec. 541.100, 
     the employee must customarily and regularly direct the work 
     of two or more other employees. The phrase ``two or more 
     other employees'' means two full-time employees or their 
     equivalent. One full-time and two half-time employees, for 
     example, are equivalent to two full-time employees. Four 
     half-time employees are also equivalent.
       (b) The supervision can be distributed among two, three or 
     more employees, but each such employee must customarily and 
     regularly direct the work of two or more other full-time 
     employees or the equivalent. Thus, for example, a department 
     with five full-time nonexempt workers may have up to two 
     exempt supervisors if each such supervisor customarily and 
     regularly directs the work of two of those workers.
       (c) An employee who merely assists the manager of a 
     particular department and supervises two or more employees 
     only in the actual manager's absence does not meet this 
     requirement.
       (d) Hours worked by an employee cannot be credited more 
     than once for different executives. Thus, a shared 
     responsibility for the supervision of the same two employees 
     in the same department does not satisfy this requirement. 
     However, a full-time employee who works four hours for one 
     supervisor and four hours for a different supervisor, for 
     example, can be credited as a half-time employee for both 
     supervisors.
       To determine whether an employee's suggestions and 
     recommendations are given ``particular weight,'' factors to 
     be considered include, but are not limited to, whether it is 
     part of the employee's job duties to make such suggestions 
     and recommendations; the frequency with which such 
     suggestions and recommendations are made or requested; and 
     the frequency with which the employee's suggestions and 
     recommendations are relied upon. Generally, an executive's 
     suggestions and recommendations must pertain to employees 
     whom the executive customarily and regularly directs. It does 
     not include an occasional suggestion with regard to the 
     change in status of a co-worker. An employee's suggestions 
     and recommendations may still be deemed to have ``particular 
     weight'' even if a higher level manager's recommendation has 
     more importance and even if the employee does not have 
     authority to make the ultimate decision as to the employee's 
     change in status.
       (a) Concurrent performance of exempt and nonexempt work 
     does not disqualify an employee from the executive exemption 
     if the requirements of Sec. 541.100 are otherwise met. 
     Whether an employee meets the requirements of Sec. 541.100 
     when the employee performs concurrent duties is determined on 
     a case-by-case basis and based on the factors set forth in 
     Sec. 541.700. Generally, exempt executives make the decision 
     regarding when to perform nonexempt duties and remain 
     responsible for the success or failure of business operations 
     under their management while performing the nonexempt work. 
     In contrast, the nonexempt employee generally is directed by 
     a supervisor to perform the exempt work or performs the 
     exempt work for defined time periods. An employee whose 
     primary duty is ordinary production work or routine, 
     recurrent or repetitive tasks cannot qualify for exemption as 
     an executive.
       (b) For example, an assistant manager in a retail 
     establishment may perform work such as serving customers, 
     cooking food, stocking shelves and cleaning the 
     establishment, but performance of such nonexempt work does 
     not preclude the exemption if the assistant manager's primary 
     duty is management. An assistant manager can supervise 
     employees and serve customers at the same time without losing 
     the exemption. An exempt employee can also simultaneously 
     direct the work of other employees and stock shelves.
       (c) In contrast, a relief supervisor or working supervisor 
     whose primary duty is performing nonexempt work on the 
     production line in a manufacturing plant does not become 
     exempt merely because the nonexempt production line employee 
     occasionally has some responsibility for directing the work 
     of other nonexempt production line employees when, for 
     example, the exempt supervisor is unavailable. Similarly, an 
     employee whose primary duty is to work as an electrician is 
     not an exempt executive even if the employee also directs the 
     work of other employees on the job site, orders parts and 
     materials for the job, and handles requests from the prime 
     contractor.

    SUBPART C--ADMINISTRATIVE EMPLOYEES (Sec. Sec. 541.200-541.204)

       (a) The term ``employee employed in a bona fide 
     administrative capacity'' in section 13(a)(1) of the Act 
     shall mean any employee:
       (1) Compensated on a salary or fee basis pursuant to 
     Sec. 541.600 at a rate of not less than $684 per week, 
     exclusive of board, lodging or other facilities;
       (2) Whose primary duty is the performance of office or non-
     manual work directly related to the management or general 
     business operations of the employer or the employer's 
     customers, constituents or stakeholders; and
       (3) Whose primary duty includes the exercise of discretion 
     and independent judgment with respect to matters of 
     significance.
       (b) The term ``salary basis'' is defined at Sec. 541.602; 
     ``fee basis'' is defined at Sec. 541.605; ``board, lodging or 
     other facilities'' is defined at Sec. 541.606; and ``primary 
     duty'' is defined at Sec. 541.700.
       (a) To qualify for the administrative exemption, an 
     employee's primary duty must be the performance of work 
     directly related to the management or general business 
     operations of the employer or the employer's customers, 
     constituents or stakeholders. The phrase ``directly related 
     to the management or general business operations'' refers to 
     the type of work performed by the employee. To meet this 
     requirement, an employee must perform work directly related 
     to assisting with the running or servicing of the employing 
     office, as distinguished, for example, from working on a 
     manufacturing production line or selling a product in a 
     retail or service establishment.
       (b) Work directly related to management or general business 
     operations includes, but is not limited to, work in 
     functional areas such as tax; finance; accounting; budgeting; 
     auditing; insurance; quality control; purchasing; 
     procurement; advertising; marketing; research; safety and 
     health; personnel management; human resources; employee 
     benefits; labor relations; public relations, government 
     relations; computer network, internet and database 
     administration; legal and regulatory compliance; and similar 
     activities. Some of these activities may be performed by 
     employees who also would qualify for another exemption.
       (c) An employee may qualify for the administrative 
     exemption if the employee's primary duty is the performance 
     of work directly related to the management or general 
     business operations of the employer's customers, constituents 
     and/or stakeholders. Thus, for example, employees acting as 
     advisers or consultants to their employer's customers, 
     constituents or stakeholders (as tax experts or financial 
     consultants, for example) may be exempt.
       (a) To qualify for the administrative exemption, an 
     employee's primary duty must include the exercise of 
     discretion and independent judgment with respect to matters 
     of significance. In general, the exercise of discretion and 
     independent judgment involves the comparison and the 
     evaluation of possible courses of conduct, and acting or 
     making a decision after the various possibilities have been 
     considered. The term ``matters of

[[Page H1011]]

     significance'' refers to the level of importance or 
     consequence of the work performed.
       (b) The phrase ``discretion and independent judgment'' must 
     be applied in the light of all the facts involved in the 
     particular employment situation in which the question arises. 
     Factors to consider when determining whether an employee 
     exercises discretion and independent judgment with respect to 
     matters of significance include, but are not limited to: 
     whether the employee has authority to formulate, affect, 
     interpret, or implement management policies or operating 
     practices; whether the employee carries out major assignments 
     in conducting the operations of the employing office; whether 
     the employee performs work that affects business operations 
     of the employing office to a substantial degree, even if the 
     employee's assignments are related to operation of a 
     particular segment of the employing office; whether the 
     employee has authority to commit the employer in matters that 
     have significant financial impact; whether the employee has 
     authority to waive or deviate from established policies and 
     procedures without prior approval; whether the employee has 
     authority to negotiate and bind the employing office on 
     significant matters; whether the employee provides 
     consultation or expert advice to management; whether the 
     employee is involved in planning longer short-term employing 
     office objectives; whether the employee investigates and 
     resolves matters of significance on behalf of management; and 
     whether the employee represents the employing office in 
     handling complaints, arbitrating disputes or resolving 
     grievances.
       (c) The exercise of discretion and independent judgment 
     implies that the employee has authority to make an 
     independent choice, free from immediate direction or 
     supervision. However, employees can exercise discretion and 
     independent judgment even if their decisions or 
     recommendations are reviewed at a higher level. Thus, the 
     term ``discretion and independent judgment'' does not require 
     that the decisions made by an employee have a finality that 
     goes with unlimited authority and a complete absence of 
     review. The decisions made as a result of the exercise of 
     discretion and independent judgment may consist of 
     recommendations for action rather than the actual taking of 
     action. The fact that an employee's decision may be subject 
     to review and that upon occasion the decisions are revised or 
     reversed after review does not mean that the employee is not 
     exercising discretion and independent judgment. For example, 
     the policies formulated by the manager of an employing office 
     may be subject to review by higher employing office officials 
     who may approve or disapprove these policies. The department 
     director who has made a study of the operations of a 
     department and who has drawn a proposed change in 
     organization may have the plan reviewed or revised by 
     superiors before it is approved.
       (d) An employer's volume of work may make it necessary to 
     employ a number of employees to perform the same or similar 
     work. The fact that many employees perform identical work or 
     work of the same relative importance does not mean that the 
     work of each such employee does not involve the exercise of 
     discretion and independent judgment with respect to matters 
     of significance.
       (e) The exercise of discretion and independent judgment 
     must be more than the use of skill in applying well-
     established techniques, procedures or specific standards 
     described in manuals or other sources. See also Sec. 541.704 
     regarding use of manuals. The exercise of discretion and 
     independent judgment also does not include clerical or 
     secretarial work, recording or tabulating data, or performing 
     other mechanical, repetitive, recurrent or routine work. An 
     employee who simply tabulates data is not exempt, even if 
     labeled as a ``statistician.''
       (f) An employee does not exercise discretion and 
     independent judgment with respect to matters of significance 
     merely because the employer will experience financial losses 
     if the employee fails to perform the job properly. For 
     example, a messenger who is entrusted with carrying large 
     sums of money does not exercise discretion and independent 
     judgment with respect to matters of significance even though 
     serious consequences may flow from the employee's neglect. 
     Similarly, an employee who operates very expensive equipment 
     does not exercise discretion and independent judgment with 
     respect to matters of significance merely because improper 
     performance of the employee's duties may cause serious 
     financial loss to the employer.
       (a) Employees who investigate claims generally meet the 
     duties requirements for the administrative exemption if their 
     duties include activities such as interviewing witnesses; 
     inspecting property damage; reviewing factual information to 
     prepare damage estimates; evaluating and making 
     recommendations regarding coverage of claims; determining 
     liability and total value of a claim; negotiating 
     settlements; and making recommendations regarding litigation.
       (b) Employees in financial services generally meet the 
     duties requirements for the administrative exemption if their 
     duties include work such as collecting and analyzing 
     information regarding the customer's income, assets, 
     investments or debts; determining which financial products 
     best meet the customer's needs and financial circumstances; 
     advising the customer regarding the advantages and 
     disadvantages of different financial products; and marketing, 
     servicing or promoting the employer's financial products. 
     However, an employee whose primary duty is selling financial 
     products does not qualify for the administrative exemption.
       (c) An employee who leads a team of other employees 
     assigned to complete major projects for the employer (such as 
     negotiating a real estate transaction or a collective 
     bargaining agreement, or designing and implementing 
     productivity improvements) generally meets the duties 
     requirements for the administrative exemption, even if the 
     employee does not have direct supervisory responsibility over 
     the other employees on the team.
       (d) An executive assistant or administrative assistant to a 
     senior management official of an employing office generally 
     meets the duties requirements for the administrative 
     exemption if such employee, without specific instructions or 
     prescribed procedures, has been delegated authority regarding 
     matters of significance.
       (e) Human resources managers who formulate, interpret or 
     implement employment policies and management consultants who 
     study the operations of an employing office and propose 
     changes in organization generally meet the duties 
     requirements for the administrative exemption. However, 
     personnel clerks who ``screen'' applicants to obtain data 
     regarding their minimum qualifications and fitness for 
     employment generally do not meet the duties requirements for 
     the administrative exemption. Such personnel clerks typically 
     will reject all applicants who do not meet minimum standards 
     for the particular job or for employment by the employing 
     office. The minimum standards are usually set by the exempt 
     human resources manager or other employing office officials, 
     and the decision to hire from the group of qualified 
     applicants who do meet the minimum standards is similarly 
     made by the exempt human resources manager or other employing 
     office officials. Thus, when the interviewing and screening 
     functions are performed by the human resources manager or 
     personnel manager who makes the hiring decision or makes 
     recommendations for hiring from the pool of qualified 
     applicants, such duties constitute exempt work, even though 
     routine, because this work is directly and closely related to 
     the employee's exempt functions.
       (f) Purchasing agents with authority to bind the employing 
     office on significant purchases generally meet the duties 
     requirements for the administrative exemption even if they 
     must consult with top management officials when making a 
     purchase commitment for materials in excess of the 
     contemplated needs.
       (g) Ordinary inspection work generally does not meet the 
     duties requirements for the administrative exemption. 
     Inspectors normally perform specialized work along 
     standardized lines involving well-established techniques and 
     procedures which may have been catalogued and described in 
     manuals or other sources. Such inspectors rely on techniques 
     and skills acquired by special training or experience. They 
     have some leeway in the performance of their work but only 
     within closely prescribed limits.
       (h) Employees usually called examiners or graders, such as 
     employees that grade lumber, generally do not meet the duties 
     requirements for the administrative exemption. Such employees 
     usually perform work involving the comparison of products 
     with established standards which are frequently catalogued. 
     Often, after continued reference to the written standards, or 
     through experience, the employee acquires sufficient 
     knowledge so that reference to written standards is 
     unnecessary. The substitution of the employee's memory for a 
     manual of standards does not convert the character of the 
     work performed to exempt work requiring the exercise of 
     discretion and independent judgment.
       (i) Reserved.
       (j) Inspectors or investigators of various types, such as 
     fire prevention or safety, building or construction, health 
     or sanitation, environmental or soils specialists and similar 
     employees, generally do not meet the duties requirements for 
     the administrative exemption because their work typically 
     does not involve work directly related to the management or 
     general business operations of the employer. Such employees 
     also do not qualify for the administrative exemption because 
     their work involves the use of skills and technical abilities 
     in gathering factual information, applying known standards or 
     prescribed procedures, determining which procedure to follow, 
     or determining whether prescribed standards or criteria are 
     met.
       (a) The term ``employee employed in a bona fide 
     administrative capacity'' in section 13(a)(1) of the Act also 
     includes employees:
       (1) Compensated on a salary or fee basis at a rate of not 
     less than $684 per week, exclusive of board, lodging, or 
     other facilities; or on a salary basis which is at least 
     equal to the entrance salary for teachers in the educational 
     establishment by which employed; and
       (2) Whose primary duty is performing administrative 
     functions directly related to academic instruction or 
     training in an educational establishment or department or 
     subdivision thereof.
       (b) The term ``educational establishment'' means an 
     elementary or secondary school

[[Page H1012]]

     system, an institution of higher education or other 
     educational institution. Sections 3(v) and 3(w) of the Act 
     define elementary and secondary schools as those day or 
     residential schools that provide elementary or secondary 
     education, as determined under State law. Under the laws of 
     most States, such education includes the curriculums in 
     grades 1 through 12; under many it includes also the 
     introductory programs in kindergarten. Such education in some 
     States may also include nursery school programs in elementary 
     education and junior college curriculums in secondary 
     education. The term ``other educational establishment'' 
     includes special schools for mentally or physically disabled 
     or gifted children, regardless of any classification of such 
     schools as elementary, secondary or higher. Factors relevant 
     in determining whether post-secondary career programs are 
     educational institutions include whether the school is 
     licensed by a state agency responsible for the state's 
     educational system or accredited by a nationally recognized 
     accrediting organization for career schools. Also, for 
     purposes of the exemption, no distinction is drawn between 
     public and private schools, or between those operated for 
     profit and those that are not for profit.
       (c) The phrase ``performing administrative functions 
     directly related to academic instruction or training'' means 
     work related to the academic operations and functions in a 
     school rather than to administration along the lines of 
     general business operations. Such academic administrative 
     functions include operations directly in the field of 
     education. Jobs relating to areas outside the educational 
     field are not within the definition of academic 
     administration.
       (1) Employees engaged in academic administrative functions 
     include: the superintendent or other head of an elementary or 
     secondary school system, and any assistants, responsible for 
     administration of such matters as curriculum, quality and 
     methods of instructing, measuring and testing the learning 
     potential and achievement of students, establishing and 
     maintaining academic and grading standards, and other aspects 
     of the teaching program; the principal and any vice-
     principals responsible for the operation of an elementary or 
     secondary school; department heads in institutions of higher 
     education responsible for the administration of the 
     mathematics department, the English department, the foreign 
     language department, etc.; academic counselors who perform 
     work such as administering school testing programs, assisting 
     students with academic problems and advising students 
     concerning degree requirements; and other employees with 
     similar responsibilities.
       (2) Jobs relating to building management and maintenance, 
     jobs relating to the health of the students, and academic 
     staff such as social workers, psychologists, lunch room 
     managers or dietitians do not perform academic administrative 
     functions. Although such work is not considered academic 
     administration, such employees may qualify for exemption 
     under Sec. 541.200 or under other sections of this part, 
     provided the requirements for such exemptions are met.

     SUBPART D--PROFESSIONAL EMPLOYEES (Sec. Sec. 541.300-541.304)

       (a) The term ``employee employed in a bona fide 
     professional capacity'' in section 13(a)(1) of the Act shall 
     mean any employee:
       (1) Compensated on a salary or fee basis pursuant to 
     Sec. 541.600 at a rate of not less than $684 per week, 
     exclusive of board, lodging or other facilities; and
       (2) Whose primary duty is the performance of work:
       (i) Requiring knowledge of an advanced type in a field of 
     science or learning customarily acquired by a prolonged 
     course of specialized intellectual instruction; or
       (ii) Requiring invention, imagination, originality or 
     talent in a recognized field of artistic or creative 
     endeavor.
       (b) The term ``salary basis'' is defined at Sec. 541.602; 
     ``fee basis'' is defined at Sec. 541.605; ``board, lodging or 
     other facilities'' is defined at Sec. 541.606; and ``primary 
     duty'' is defined at Sec. 541.700.
       (a) To qualify for the learned professional exemption, an 
     employee's primary duty must be the performance of work 
     requiring advanced knowledge in a field of science or 
     learning customarily acquired by a prolonged course of 
     specialized intellectual instruction. This primary duty test 
     includes three elements:
       (1) The employee must perform work requiring advanced 
     knowledge;
       (2) The advanced knowledge must be in a field of science or 
     learning; and
       (3) The advanced knowledge must be customarily acquired by 
     a prolonged course of specialized intellectual instruction.
       (b) The phrase ``work requiring advanced knowledge'' means 
     work which is predominantly intellectual in character, and 
     which includes work requiring the consistent exercise of 
     discretion and judgment, as distinguished from performance of 
     routine mental, manual, mechanical or physical work. An 
     employee who performs work requiring advanced knowledge 
     generally uses the advanced knowledge to analyze, interpret 
     or make deductions from varying facts or circumstances. 
     Advanced knowledge cannot be attained at the high school 
     level.
       (c) The phrase ``field of science or learning'' includes 
     the traditional professions of law, medicine, theology, 
     accounting, actuarial computation, engineering, architecture, 
     teaching, various types of physical, chemical and biological 
     sciences, pharmacy and other similar occupations that have a 
     recognized professional status as distinguished from the 
     mechanical arts or skilled trades where in some instances the 
     knowledge is of a fairly advanced type, but is not in a field 
     of science or learning.
       (d) The phrase ``customarily acquired by a prolonged course 
     of specialized intellectual instruction'' restricts the 
     exemption to professions where specialized academic training 
     is a standard prerequisite for entrance into the profession. 
     The best prima facie evidence that an employee meets this 
     requirement is possession of the appropriate academic degree. 
     However, the word ``customarily'' means that the exemption is 
     also available to employees in such professions who have 
     substantially the same knowledge level and perform 
     substantially the same work as the degreed employees, but who 
     attained the advanced knowledge through a combination of work 
     experience and intellectual instruction. Thus, for example, 
     the learned professional exemption is available to the 
     occasional lawyer who has not gone to law school, or the 
     occasional chemist who is not the possessor of a degree in 
     chemistry. However, the learned professional exemption is not 
     available for occupations that customarily may be performed 
     with only the general knowledge acquired by an academic 
     degree in any field, with knowledge acquired through an 
     apprenticeship, or with training in the performance of 
     routine mental, manual, mechanical or physical processes. The 
     learned professional exemption also does not apply to 
     occupations in which most employees have acquired their skill 
     by experience rather than by advanced specialized 
     intellectual instruction.
       (e)(1) Registered or certified medical technologists. 
     Registered or certified medical technologists who have 
     successfully completed three academic years of pre-
     professional study in an accredited college or university 
     plus a fourth year of professional course work in a school of 
     medical technology approved by the Council of Medical 
     Education of the American Medical Association generally meet 
     the duties requirements for the learned professional 
     exemption.
       (2) Nurses. Registered nurses who are registered by the 
     appropriate State examining board generally meet the duties 
     requirements for the learned professional exemption. Licensed 
     practical nurses and other similar health care employees, 
     however, generally do not qualify as exempt learned 
     professionals because possession of a specialized advanced 
     academic degree is not a standard prerequisite for entry into 
     such occupations.
       (3) Dental hygienists. Dental hygienists who have 
     successfully completed four academic years of pre-
     professional and professional study in an accredited college 
     or university approved by the Commission on Accreditation of 
     Dental and Dental Auxiliary Educational Programs of the 
     American Dental Association generally meet the duties 
     requirements for the learned professional exemption.
       (4) Physician assistants. Physician assistants who have 
     successfully completed four academic years of pre-
     professional and professional study, including graduation 
     from a physician assistant program accredited by the 
     Accreditation Review Commission on Education for the 
     Physician Assistant, and who are certified by the National 
     Commission on Certification of Physician Assistants generally 
     meet the duties requirements for the learned professional 
     exemption.
       (5) Accountants. Certified public accountants generally 
     meet the duties requirements for the learned professional 
     exemption. In addition, many other accountants who are not 
     certified public accountants but perform similar job duties 
     may qualify as exempt learned professionals. However, 
     accounting clerks, bookkeepers and other employees who 
     normally perform a great deal of routine work generally will 
     not qualify as exempt professionals.
       (6) Chefs. Chefs, such as executive chefs and sous chefs, 
     who have attained a four-year specialized academic degree in 
     a culinary arts program, generally meet the duties 
     requirements for the learned professional exemption. The 
     learned professional exemption is not available to cooks who 
     perform predominantly routine mental, manual, mechanical or 
     physical work.
       (7) Paralegals. Paralegals and legal assistants generally 
     do not qualify as exempt learned professionals because an 
     advanced specialized academic degree is not a standard 
     prerequisite for entry into the field. Although many 
     paralegals possess general four-year advanced degrees, most 
     specialized paralegal programs are two-year associate degree 
     programs from a community college or equivalent institution. 
     However, the learned professional exemption is available for 
     paralegals who possess advanced specialized degrees in other 
     professional fields and apply advanced knowledge in that 
     field in the performance of their duties. For example, if a 
     law firm hires an engineer as a paralegal to provide expert 
     advice on product liability cases or to assist on patent 
     matters, that engineer would qualify for exemption.
       (8) Athletic trainers. Athletic trainers who have 
     successfully completed four academic years of pre-
     professional and professional study in a specialized 
     curriculum accredited by the Commission on Accreditation of 
     Allied Health Education Programs and who are certified by the 
     Board of Certification of the

[[Page H1013]]

     National Athletic Trainers Association Board of Certification 
     generally meet the duties requirements for the learned 
     professional exemption.
       (9) Reserved.
       (f) The areas in which the professional exemption may be 
     available are expanding. As knowledge is developed, academic 
     training is broadened and specialized degrees are offered in 
     new and diverse fields, thus creating new specialists in 
     particular fields of science or learning. When an advanced 
     specialized degree has become a standard requirement for a 
     particular occupation, that occupation may have acquired the 
     characteristics of a learned profession. Accrediting and 
     certifying organizations similar to those listed in 
     paragraphs (e)(1), (e)(3), (e)(4) and (e)(8) of this section 
     also may be created in the future. Such organizations may 
     develop similar specialized curriculums and certification 
     programs which, if a standard requirement for a particular 
     occupation, may indicate that the occupation has acquired the 
     characteristics of a learned profession.
       (a) To qualify for the creative professional exemption, an 
     employee's primary duty must be the performance of work 
     requiring invention, imagination, originality or talent in a 
     recognized field of artistic or creative endeavor as opposed 
     to routine mental, manual, mechanical or physical work. The 
     exemption does not apply to work which can be produced by a 
     person with general manual or intellectual ability and 
     training.
       (b) To qualify for exemption as a creative professional, 
     the work performed must be ``in a recognized field of 
     artistic or creative endeavor.'' This includes such fields as 
     music, writing, acting and the graphic arts.
       (c) The requirement of ``invention, imagination, 
     originality or talent'' distinguishes the creative 
     professions from work that primarily depends on intelligence, 
     diligence and accuracy. The duties of employees vary widely, 
     and exemption as a creative professional depends on the 
     extent of the invention, imagination, originality or talent 
     exercised by the employee. Determination of exempt creative 
     professional status, therefore, must be made on a case-by-
     case basis. This requirement generally is met by actors, 
     musicians, composers, conductors, and soloists; painters who 
     at most are given the subject matter of their painting; 
     cartoonists who are merely told the title or underlying 
     concept of a cartoon and must rely on their own creative 
     ability to express the concept; essayists, novelists, short-
     story writers and screen-play writers who choose their own 
     subjects and hand in a finished piece of work to their 
     employers (the majority of such persons are, of course, not 
     employees but self-employed); and persons holding the more 
     responsible writing positions in advertising agencies. This 
     requirement generally is not met by a person who is employed 
     as a copyist, as an ``animator'' of motion-picture cartoons, 
     or as a retoucher of photographs, since such work is not 
     properly described as creative in character.
       (d) Journalists may satisfy the duties requirements for the 
     creative professional exemption if their primary duty is work 
     requiring invention, imagination, originality or talent, as 
     opposed to work which depends primarily on intelligence, 
     diligence and accuracy. Employees of newspapers, magazines, 
     television and other media are not exempt creative 
     professionals if they only collect, organize and record 
     information that is routine or already public, or if they do 
     not contribute a unique interpretation or analysis to a news 
     product. Thus, for example, newspaper reporters who merely 
     rewrite press releases or who write standard recounts of 
     public information by gathering facts on routine community 
     events are not exempt creative professionals. Reporters also 
     do not qualify as exempt creative professionals if their work 
     product is subject to substantial control by the employer. 
     However, journalists may qualify as exempt creative 
     professionals if their primary duty is performing on the air 
     in radio, television or other electronic media; conducting 
     investigative interviews; analyzing or interpreting public 
     events; writing editorials, opinion columns or other 
     commentary; or acting as a narrator or commentator.
       (a) The term ``employee employed in a bona fide 
     professional capacity'' in section 13(a)(1) of the Act also 
     means any employee with a primary duty of teaching, tutoring, 
     instructing or lecturing in the activity of imparting 
     knowledge and who is employed and engaged in this activity as 
     a teacher in an educational establishment by which the 
     employee is employed. The term ``educational establishment'' 
     is defined in Sec. 541.204(b).
       (b) Exempt teachers include, but are not limited to: 
     Regular academic teachers; teachers of kindergarten or 
     nursery school pupils; teachers of gifted or disabled 
     children; teachers of skilled and semi-skilled trades and 
     occupations; teachers engaged in automobile driving 
     instruction; aircraft flight instructors; home economics 
     teachers; and vocal or instrumental music instructors. Those 
     faculty members who are engaged as teachers but also spend a 
     considerable amount of their time in extracurricular 
     activities such as coaching athletic teams or acting as 
     moderators or advisors in such areas as drama, speech, debate 
     or journalism are engaged in teaching. Such activities are a 
     recognized part of the schools' responsibility in 
     contributing to the educational development of the student.
       (c) The possession of an elementary or secondary teacher's 
     certificate provides a clear means of identifying the 
     individuals contemplated as being within the scope of the 
     exemption for teaching professionals. Teachers who possess a 
     teaching certificate qualify for the exemption regardless of 
     the terminology (e.g., permanent, conditional, standard, 
     provisional, temporary, emergency, or unlimited) used by the 
     State to refer to different kinds of certificates. However, 
     private schools and public schools are not uniform in 
     requiring a certificate for employment as an elementary or 
     secondary school teacher, and a teacher's certificate is not 
     generally necessary for employment in institutions of higher 
     education or other educational establishments. Therefore, a 
     teacher who is not certified may be considered for exemption, 
     provided that such individual is employed as a teacher by the 
     employing school or school system.
       (d) The requirements of Sec. 541.300 and Subpart G (salary 
     requirements) of this part do not apply to the teaching 
     professionals described in this section.
       (a) The term ``employee employed in a bona fide 
     professional capacity'' in section 13(a)(1) of the Act also 
     shall mean:
       (1) Any employee who is the holder of a valid license or 
     certificate permitting the practice of law or medicine or any 
     of their branches and is actually engaged in the practice 
     thereof; and
       (2) Any employee who is the holder of the requisite 
     academic degree for the general practice of medicine and is 
     engaged in an internship or resident program pursuant to the 
     practice of the profession.
       (b) In the case of medicine, the exemption applies to 
     physicians and other practitioners licensed and practicing in 
     the field of medical science and healing or any of the 
     medical specialties practiced by physicians or practitioners. 
     The term ``physicians'' includes medical doctors including 
     general practitioners and specialists, osteopathic physicians 
     (doctors of osteopathy), podiatrists, dentists (doctors of 
     dental medicine), and optometrists (doctors of optometry or 
     bachelors of science in optometry).
       (c) Employees engaged in internship or resident programs, 
     whether or not licensed to practice prior to commencement of 
     the program, qualify as exempt professionals if they enter 
     such internship or resident programs after the earning of the 
     appropriate degree required for the general practice of their 
     profession.
       (d) The requirements of Sec. 541.300 and subpart G (salary 
     requirements) of this part do not apply to the employees 
     described in this section.

        SUBPART E-COMPUTER EMPLOYEES (Sec. Sec. 541.400-541.402)

       (a) Computer systems analysts, computer programmers, 
     software engineers or other similarly skilled workers in the 
     computer field are eligible for exemption as professionals 
     under section 13(a)(1) of the Act and under section 13(a)(17) 
     of the Act. Because job titles vary widely and change quickly 
     in the computer industry, job titles are not determinative of 
     the applicability of this exemption.
       (b) The section 13(a)(1) exemption applies to any computer 
     employee who is compensated on a salary or fee basis at a 
     rate of not less than $684 per week, exclusive of board, 
     lodging, or other facilities.
       The section 13(a)(17) exemption applies to any computer 
     employee compensated on an hourly basis at a rate of not less 
     than $27.63 an hour. In addition, under either section 
     13(a)(1) or section 13(a)(17) of the Act, the exemptions 
     apply only to computer employees whose primary duty consists 
     of:
       (1) The application of systems analysis techniques and 
     procedures, including consulting with users, to determine 
     hardware, software or system functional specifications;
       (2) The design, development, documentation, analysis, 
     creation, testing or modification of computer systems or 
     programs, including prototypes, based on and related to user 
     or system design specifications;
       (3) The design, documentation, testing, creation or 
     modification of computer programs related to machine 
     operating systems; or
       (4) A combination of the aforementioned duties, the 
     performance of which requires the same level of skills.
       (c) The term ``salary basis'' is defined at Sec. 541.602; 
     ``fee basis'' is defined at Sec. 541.605; ``board, lodging or 
     other facilities'' is defined at Sec. 541.606; and ``primary 
     duty'' is defined at Sec. 541.700.
       The exemption for employees in computer occupations does 
     not include employees engaged in the manufacture or repair of 
     computer hardware and related equipment. Employees whose work 
     is highly dependent upon, or facilitated by, the use of 
     computers and computer software programs (e.g., engineers, 
     drafters and others skilled in computer-aided design 
     software), but who are not primarily engaged in computer 
     systems analysis and programming or other similarly skilled 
     computer-related occupations identified in Sec. 541.400(b), 
     are also not exempt computer professionals.

[[Page H1014]]


  

       Computer employees within the scope of this exemption, as 
     well as those employees not within its scope, may also have 
     executive and administrative duties which qualify the 
     employees for exemption under subpart B or subpart C of this 
     part. For example, systems analysts and computer programmers 
     generally meet the duties requirements for the administrative 
     exemption if their primary duty includes work such as 
     planning, scheduling, and coordinating activities required to 
     develop systems to solve complex business, scientific or 
     engineering problems of the employer or the employer's 
     customers, constituents or stakeholders. Similarly, a senior 
     or lead computer programmer who manages the work of two or 
     more other programmers in a customarily recognized department 
     or subdivision of the employer, and whose recommendations as 
     to the hiring, firing, advancement, promotion or other change 
     of status of the other programmers are given particular 
     weight, generally meets the duties requirements for the 
     executive exemption.

                          SUBPART F--Reserved

       SUBPART G--SALARY REQUIREMENTS (Sec. Sec. 541.600-541.607)

     Sec. 541.600 Amount of salary required.
       (a) To qualify as an exempt executive, administrative or 
     professional employee under section 13(a)(1) of the Act, an 
     employee must be compensated on a salary basis at a rate of 
     not less than $684 per week, exclusive of board, lodging or 
     other facilities. Administrative and professional employees 
     may also be paid on a fee basis, as defined in Sec. 541.605.
       (b) The required amount of compensation per week may be 
     translated into equivalent amounts for periods longer than 
     one week. For example, the $684-per-week requirement will be 
     met if the employee is compensated biweekly on a salary basis 
     of not less than $1,368, semimonthly on a salary basis of not 
     less than $1,482, or monthly on a salary basis of not less 
     than $2,964. However, the shortest period of payment that 
     will meet this compensation requirement is one week.
       (c) In the case of academic administrative employees, the 
     compensation requirement also may be met by compensation on a 
     salary basis at a rate at least equal to the entrance salary 
     for teachers in the educational establishment by which the 
     employee is employed, as provided in Sec. 541.204(a)(1).
       (d) In the case of computer employees, the compensation 
     requirement also may be met by compensation on an hourly 
     basis at a rate not less than $27.63 an hour, as provided in 
     Sec. 541.400(b).
       (e) In the case of professional employees, the compensation 
     requirements in this section shall not apply to employees 
     engaged as teachers (see Sec. 541.303); employees who hold a 
     valid license or certificate permitting the practice of law 
     or medicine or any of their branches and are actually engaged 
     in the practice thereof (see Sec. 541.304); or to employees 
     who hold the requisite academic degree for the general 
     practice of medicine and are engaged in an internship or 
     resident program pursuant to the practice of the profession 
     (see Sec. 541.304). In the case of medical occupations, the 
     exception from the salary or fee requirement does not apply 
     to pharmacists, nurses, therapists, technologists, 
     sanitarians, dietitians, social workers, psychologists, 
     psychometrists, or other professions which service the 
     medical profession.
       (a)(1) Beginning on the effective date of these Substantive 
     Regulations, an employee with total annual compensation of at 
     least $107,432 is deemed exempt under section 13(a)(1) of the 
     Act if the employee customarily and regularly performs any 
     one or more of the exempt duties or responsibilities of an 
     executive, administrative or professional employee as 
     identified in subparts B, C or D of this part.
       (2) Where the annual period covers periods both prior to 
     and after the effective date of these Substantive 
     Regulations, the amount of total annual compensation due will 
     be determined on a proportional basis.
       (b)(1) ``Total annual compensation'' must include at least 
     $684 per week paid on a salary or fee basis as set forth in 
     Sec. Sec. 541.602 and 541.605, except that Sec. 541.602(a)(3) 
     shall not apply to highly compensated employees. Total annual 
     compensation may also include commissions, nondiscretionary 
     bonuses and other nondiscretionary compensation earned during 
     a 52-week period. Total annual compensation does not include 
     board, lodging and other facilities as defined in 
     Sec. 541.606, and does not include payments for medical 
     insurance, payments for life insurance, contributions to 
     retirement plans and the cost of other fringe benefits.
       (2) If an employee's total annual compensation does not 
     total at least the amount specified in the applicable 
     subsection of paragraph (a) by the last pay period of the 52-
     week period, the employer may, during the last pay period or 
     within one month after the end of the 52-week period, make 
     one final payment sufficient to achieve the required level. 
     For example, for a 52-week period, an employee may earn 
     $90,000 in base salary, and the employer may anticipate that 
     the employee also will earn $17,432 in other payments. 
     However, in the final quarter of the year, the employee 
     actually only earns $12,000 in other payments. In this 
     situation, the employer may within one month after the end of 
     the year make a payment of at least $5,432 to the employee. 
     Any such final payment made after the end of the 52-week 
     period may count only toward the prior year's total annual 
     compensation and not toward the total annual compensation in 
     the year it was paid. If the employer fails to make such a 
     payment, the employee does not qualify as a highly 
     compensated employee, but may still qualify as exempt under 
     subparts B, C, or D of this part.
       (3) An employee who does not work a full year for the 
     employer, either because the employee is newly hired after 
     the beginning of the year or ends the employment before the 
     end of the year, may qualify for exemption under this section 
     if the employee receives a pro rata portion of the minimum 
     amount established in paragraph (a) of this section, based 
     upon the number of weeks that the employee will be or has 
     been employed. An employer may make one final payment as 
     under paragraph (b)(2) of this section within one month after 
     the end of employment.
       (4) The employer may utilize any 52-week period as the 
     year, such as a calendar year, a fiscal year, or an 
     anniversary of hire year. If the employer does not identify 
     some other year period in advance, the calendar year will 
     apply.
       (c) A high level of compensation is a strong indicator of 
     an employee's exempt status, thus eliminating the need for a 
     detailed analysis of the employee's job duties. Thus, a 
     highly compensated employee will qualify for exemption if the 
     employee customarily and regularly performs any one or more 
     of the exempt duties or responsibilities of an executive, 
     administrative or professional employee identified in 
     subparts B, C or D of this part. An employee may qualify as a 
     highly compensated executive employee, for example, if the 
     employee customarily and regularly directs the work of two or 
     more other employees, even though the employee does not meet 
     all of the other requirements for the executive exemption 
     under Sec. 541.100.
       (d) This section applies only to employees whose primary 
     duty includes performing office or non-manual work. Thus, for 
     example, non-management production-line workers and non-
     management employees in maintenance, construction and similar 
     occupations such as carpenters, electricians, mechanics, 
     plumbers, iron workers, craftsmen, operating engineers, 
     longshoremen, construction workers, laborers and other 
     employees who perform work involving repetitive operations 
     with their hands, physical skill and energy are not exempt 
     under this section no matter how highly paid they might be.
       (a) General rule. An employee will be considered to be paid 
     on a ``salary basis'' within the meaning of this part if the 
     employee regularly receives each pay period on a weekly, or 
     less frequent basis, a predetermined amount constituting all 
     or part of the employee's compensation, which amount is not 
     subject to reduction because of variations in the quality or 
     quantity of the work performed.
       (1) Subject to the exceptions provided in paragraph (b) of 
     this section, an exempt employee must receive the full salary 
     for any week in which the employee performs any work without 
     regard to the number of days or hours worked. Exempt 
     employees need not be paid for any workweek in which they 
     perform no work.
       (2) An employee is not paid on a salary basis if deductions 
     from the employee's predetermined compensation are made for 
     absences occasioned by the employer or by the operating 
     requirements of the employing office. If the employee is 
     ready, willing and able to work, deductions may not be made 
     for time when work is not available.
       (3) Up to ten percent of the salary amount required by 
     Sec. 541.600(a) may be satisfied by the payment of 
     nondiscretionary bonuses, incentives and commissions, that 
     are paid annually or more frequently. The employer may 
     utilize any 52-week period as the year, such as a calendar 
     year, a fiscal year, or an anniversary of hire year. If the 
     employer does not identify some other year period in advance, 
     the calendar year will apply. This provision does not apply 
     to highly compensated employees under Sec. 541.601.
       (i) If by the last pay period of the 52-week period the sum 
     of the employee's weekly salary plus nondiscretionary bonus, 
     incentive, and commission payments received is less than 52 
     times the weekly salary amount required by Sec. 541.600(a), 
     the employer may make one final payment sufficient to achieve 
     the required level no later than the next pay period after 
     the end of the year. Any such final payment made after the 
     end of the 52-week period may count only toward the prior 
     year's salary amount and not toward the salary amount in the 
     year it was paid.
       (ii) An employee who does not work a full 52-week period 
     for the employer, either because the employee is newly hired 
     after the beginning of this period or ends the employment 
     before the end of this period, may qualify for exemption if 
     the employee receives a pro rata portion of the minimum 
     amount established in paragraph (a)(3) of this section, based 
     upon the number of weeks that the employee will be or has 
     been employed. An employer may make one final payment as 
     under paragraph (a)(3)(i) of this section within one pay 
     period after the end of employment.
       (b) Exceptions. The prohibition against deductions from pay 
     in the salary basis requirement is subject to the following 
     exceptions:
       (1) Deductions from pay may be made when an exempt employee 
     is absent from work for one or more full days for personal 
     reasons,

[[Page H1015]]

     other than sickness or disability. Thus, if an employee is 
     absent for two full days to handle personal affairs, the 
     employee's salaried status will not be affected if deductions 
     are made from the salary for two full-day absences. However, 
     if an exempt employee is absent for one and a half days for 
     personal reasons, the employer can deduct only for the one 
     full-day absence.
       (2) Deductions from pay may be made for absences of one or 
     more full days occasioned by sickness or disability 
     (including work-related accidents) if the deduction is made 
     in accordance with a bona fide plan, policy or practice of 
     providing compensation for loss of salary occasioned by such 
     sickness or disability. The employer is not required to pay 
     any portion of the employee's salary for full-day absences 
     for which the employee receives compensation under the plan, 
     policy or practice. Deductions for such full-day absences 
     also may be made before the employee has qualified under the 
     plan, policy or practice, and after the employee has 
     exhausted the leave allowance thereunder. Thus, for example, 
     if an employer maintains a short-term disability insurance 
     plan providing salary replacement for 12 weeks starting on 
     the fourth day of absence, the employer may make deductions 
     from pay for the three days of absence before the employee 
     qualifies for benefits under the plan; for the twelve weeks 
     in which the employee receives salary replacement benefits 
     under the plan; and for absences after the employee has 
     exhausted the 12 weeks of salary replacement benefits.
       (3) While an employer cannot make deductions from pay for 
     absences of an exempt employee occasioned by jury duty, 
     attendance as a witness or temporary military leave, the 
     employer can offset any amounts received by an employee as 
     jury fees, witness fees or military pay for a particular week 
     against the salary due for that particular week without loss 
     of the exemption.
       (4) Deductions from pay of exempt employees may be made for 
     penalties imposed in good faith for infractions of safety 
     rules of major significance. Safety rules of major 
     significance include those relating to the prevention of 
     serious danger in the workplace or to other employees, such 
     as rules prohibiting smoking in explosive plants, oil 
     refineries and coal mines.
       (5) Deductions from pay of exempt employees may be made for 
     unpaid disciplinary suspensions of one or more full days 
     imposed in good faith for infractions of workplace conduct 
     rules. Such suspensions must be imposed pursuant to a written 
     policy applicable to all employees. Thus, for example, an 
     employer may suspend an exempt employee without pay for three 
     days for violating a generally applicable written policy 
     prohibiting sexual harassment. Similarly, an employer may 
     suspend an exempt employee without pay for twelve days for 
     violating a generally applicable written policy prohibiting 
     workplace violence.
       (6) An employer is not required to pay the full salary in 
     the initial or terminal week of employment. Rather, an 
     employer may pay a proportionate part of an employee's full 
     salary for the time actually worked in the first and last 
     week of employment. In such weeks, the payment of an hourly 
     or daily equivalent of the employee's full salary for the 
     time actually worked will meet the requirement. However, 
     employees are not paid on a salary basis within the meaning 
     of these regulations if they are employed occasionally for a 
     few days, and the employer pays them a proportionate part of 
     the weekly salary when so employed.
       (7) An employer is not required to pay the full salary for 
     weeks in which an exempt employee takes unpaid leave under 
     the Family and Medical Leave Act. Rather, when an exempt 
     employee takes unpaid leave under the Family and Medical 
     Leave Act, an employer may pay a proportionate part of the 
     full salary for time actually worked. For example, if an 
     employee who normally works 40 hours per week uses four hours 
     of unpaid leave under the Family and Medical Leave Act, the 
     employer could deduct 10 percent of the employee's normal 
     salary that week.
       (c) When calculating the amount of a deduction from pay 
     allowed under paragraph (b) of this section, the employer may 
     use the hourly or daily equivalent of the employee's full 
     weekly salary or any other amount proportional to the time 
     actually missed by the employee. A deduction from pay as a 
     penalty for violations of major safety rules under paragraph 
     (b)(4) of this section may be made in any amount.
       (a) An employer who makes improper deductions from salary 
     shall lose the exemption if the facts demonstrate that the 
     employer did not intend to pay employees on a salary basis. 
     An actual practice of making improper deductions demonstrates 
     that the employer did not intend to pay employees on a salary 
     basis. The factors to consider when determining whether an 
     employer has an actual practice of making improper deductions 
     include, but are not limited to: the number of improper 
     deductions, particularly as compared to the number of 
     employee infractions warranting discipline; the time period 
     during which the employer made improper deductions; the 
     number and geographic location of employees whose salary was 
     improperly reduced; the number and geographic location of 
     managers responsible for taking the improper deductions; and 
     whether the employer has a clearly communicated policy 
     permitting or prohibiting improper deductions.
       (b) If the facts demonstrate that the employer has an 
     actual practice of making improper deductions, the exemption 
     is lost during the time period in which the improper 
     deductions were made for employees in the same job 
     classification working for the same managers responsible for 
     the actual improper deductions. Employees in different job 
     classifications or who work for different managers do not 
     lose their status as exempt employees. Thus, for example, if 
     a manager routinely docks the pay of engineers at that 
     facility for partial-day personal absences, then all 
     engineers at that facility whose pay could have been 
     improperly docked by the manager would lose the exemption; 
     engineers at other facilities or working for other managers, 
     however, would remain exempt.
       (c) Improper deductions that are either isolated or 
     inadvertent will not result in loss of the exemption for any 
     employees subject to such improper deductions, if the 
     employer reimburses the employees for such improper 
     deductions.
       (d) If an employer has a clearly communicated policy that 
     prohibits the improper pay deductions specified in 
     Sec. 541.602(a) and includes a complaint mechanism, 
     reimburses employees for any improper deductions and makes a 
     good faith commitment to comply in the future, such employer 
     will not lose the exemption for any employees unless the 
     employer willfully violates the policy by continuing to make 
     improper deductions after receiving employee complaints. If 
     an employer fails to reimburse employees for any improper 
     deductions or continues to make improper deductions after 
     receiving employee complaints, the exemption is lost during 
     the time period in which the improper deductions were made 
     for employees in the same job classification working for the 
     same managers responsible for the actual improper deductions. 
     The best evidence of a clearly communicated policy is a 
     written policy that was distributed to employees prior to the 
     improper pay deductions by, for example, providing a copy of 
     the policy to employees at the time of hire, publishing the 
     policy in an employee handbook or publishing the policy on 
     the employer's Intranet.
       (e) This section shall not be construed in an unduly 
     technical manner so as to defeat the exemption.
       (a) An employer may provide an exempt employee with 
     additional compensation without losing the exemption or 
     violating the salary basis requirement, if the employment 
     arrangement also includes a guarantee of at least the minimum 
     weekly-required amount paid on a salary basis. Thus, for 
     example, an exempt employee guaranteed at least $684 each 
     week paid on a salary basis may also receive additional 
     compensation of a one percent commission on sales. An exempt 
     employee also may receive a percentage of the sales or 
     profits of the employer if the employment arrangement also 
     includes a guarantee of at least $684 each week paid on a 
     salary basis. Similarly, the exemption is not lost if an 
     exempt employee who is guaranteed at least $684 each week 
     paid on a salary basis also receives additional compensation 
     based on hours worked for work beyond the normal workweek. 
     Such additional compensation may be paid on any basis (e.g., 
     flat sum, bonus payment, straight-time hourly amount, time 
     and one-half or any other basis), and may include paid time 
     off.
       (b) An exempt employee's earnings may be computed on an 
     hourly, a daily or a shift basis, without losing the 
     exemption or violating the salary basis requirement, if the 
     employment arrangement also includes a guarantee of at least 
     the minimum weekly required amount paid on a salary basis 
     regardless of the number of hours, days or shifts worked, and 
     a reasonable relationship exists between the guaranteed 
     amount and the amount actually earned. The reasonable 
     relationship test will be met if the weekly guarantee is 
     roughly equivalent to the employee's usual earnings at the 
     assigned hourly, daily or shift rate for the employee's 
     normal scheduled workweek. Thus, for example, an exempt 
     employee guaranteed compensation of at least $725 for any 
     week in which the employee performs any work, and who 
     normally works four or five shifts each week, may be paid 
     $210 per shift without violating the $684-per-week salary 
     basis requirement. The reasonable relationship requirement 
     applies only if the employee's pay is computed on an hourly, 
     daily or shift basis. It does not apply, for example, to an 
     exempt store manager paid a guaranteed salary per week that 
     exceeds the current salary level who also receives a 
     commission of one-half percent of all sales in the store or 
     five percent of the store's profits, which in some weeks may 
     total as much as, or even more than, the guaranteed salary.
       (a) Administrative and professional employees may be paid 
     on a fee basis, rather than on a salary basis. An employee 
     will be considered to be paid on a ``fee basis'' within the 
     meaning of these regulations if the employee is paid an 
     agreed sum for a single job regardless of the time required 
     for its completion. These payments resemble piecework 
     payments with the important distinction that generally a 
     ``fee'' is paid for the kind of job that is unique rather 
     than for a series of jobs repeated an indefinite number of 
     times and for which payment on an identical basis is made 
     over and over again. Payments based on the number of hours or 
     days worked and

[[Page H1016]]

     not on the accomplishment of a given single task are not 
     considered payments on a fee basis.
       (b) To determine whether the fee payment meets the minimum 
     amount of salary required for exemption under these 
     regulations, the amount paid to the employee will be tested 
     by determining the time worked on the job and whether the fee 
     payment is at a rate that would amount to at least the 
     minimum salary per week, as required by Sec. Sec. 541.600(a) 
     and 541.602(a), if the employee worked 40 hours. Thus, an 
     artist paid $350 for a picture that took 20 hours to complete 
     meets the $684 minimum salary requirement for exemption since 
     earnings at this rate would yield the artist $700 if 40 hours 
     were worked.
       (a) To qualify for exemption under section 13(a)(1) of the 
     Act, an employee must earn the minimum salary amount set 
     forth in Sec. 541.600, ``exclusive of board, lodging or other 
     facilities.'' The phrase ``exclusive of board, lodging or 
     other facilities'' means ``free and clear'' or independent of 
     any claimed credit for non-cash items of value that an 
     employer may provide to an employee. Thus, the costs incurred 
     by an employer to provide an employee with board, lodging or 
     other facilities may not count towards the minimum salary 
     amount required for exemption under this part 541. Such 
     separate transactions are not prohibited between employers 
     and their exempt employees, but the costs to employers 
     associated with such transactions may not be considered when 
     determining if an employee has received the full required 
     minimum salary payment.
       (b) Regulations defining what constitutes ``board, lodging, 
     or other facilities'' are contained in 29 CFR part 531. As 
     described in 29 CFR 531.32, the term ``other facilities'' 
     refers to items similar to board and lodging, such as meals 
     furnished at company restaurants or cafeterias or by 
     hospitals, hotels, or restaurants to their employees; meals, 
     dormitory rooms, and tuition furnished by a college to its 
     student employees; merchandise furnished at company stores or 
     commissaries, including articles of food, clothing, and 
     household effects; housing furnished for dwelling purposes; 
     and transportation furnished to employees for ordinary 
     commuting between their homes and work.

SUBPART H--DEFINITIONS AND MISCELLANEOUS PROVISIONS (Sec. Sec. 541.700-
                                541.710)

       (a) To qualify for exemption under this part, an employee's 
     ``primary duty'' must be the performance of exempt work. The 
     term ``primary duty'' means the principal, main, major or 
     most important duty that the employee performs. Determination 
     of an employee's primary duty must be based on all the facts 
     in a particular case, with the major emphasis on the 
     character of the employee's job as a whole. Factors to 
     consider when determining the primary duty of an employee 
     include, but are not limited to, the relative importance of 
     the exempt duties as compared with other types of duties; the 
     amount of time spent performing exempt work; the employee's 
     relative freedom from direct supervision; and the 
     relationship between the employee's salary and the wages paid 
     to other employees for the kind of nonexempt work performed 
     by the employee.
       (b) The amount of time spent performing exempt work can be 
     a useful guide in determining whether exempt work is the 
     primary duty of an employee. Thus, employees who spend more 
     than 50 percent of their time performing exempt work will 
     generally satisfy the primary duty requirement. Time alone, 
     however, is not the sole test, and nothing in this section 
     requires that exempt employees spend more than 50 percent of 
     their time performing exempt work. Employees who do not spend 
     more than 50 percent of their time performing exempt duties 
     may nonetheless meet the primary duty requirement if the 
     other factors support such a conclusion.
       (c) Thus, for example, assistant managers in a retail 
     establishment who perform exempt executive work such as 
     supervising and directing the work of other employees, 
     ordering merchandise, managing the budget and authorizing 
     payment of bills may have management as their primary duty 
     even if the assistant managers spend more than 50 percent of 
     the time performing nonexempt work such as running the cash 
     register. However, if such assistant managers are closely 
     supervised and earn little more than the nonexempt employees, 
     the assistant managers generally would not satisfy the 
     primary duty requirement.
       The phrase ``customarily and regularly'' means a frequency 
     that must be greater than occasional but which, of course, 
     may be less than constant. Tasks or work performed 
     ``customarily and regularly'' includes work normally and 
     recurrently performed every workweek; it does not include 
     isolated or one-time tasks.
       The term ``exempt work'' means all work described in 
     Sec. Sec. 541.100, 541.101, 541.200, 541.300, 541.301, 
     541.302, 541.303, 541.304, and 541.400, and the activities 
     directly and closely related to such work. All other work is 
     considered ``nonexempt.''
       (a) Work that is ``directly and closely related'' to the 
     performance of exempt work is also considered exempt work. 
     The phrase ``directly and closely related'' means tasks that 
     are related to exempt duties and that contribute to or 
     facilitate performance of exempt work. Thus, ``directly and 
     closely related'' work may include physical tasks and menial 
     tasks that arise out of exempt duties, and the routine work 
     without which the exempt employee's exempt work cannot be 
     performed properly. Work ``directly and closely related'' to 
     the performance of exempt duties may also include 
     recordkeeping; monitoring and adjusting machinery; taking 
     notes; using the computer to create documents or 
     presentations; opening the mail for the purpose of reading it 
     and making decisions; and using a photocopier or fax machine. 
     Work is not ``directly and closely related'' if the work is 
     remotely related or completely unrelated to exempt duties.
       (b) The following examples further illustrate the type of 
     work that is and is not normally considered as directly and 
     closely related to exempt work:
       (1) Keeping time, production or sales records for 
     subordinates is work directly and closely related to an 
     exempt executive's function of managing a department and 
     supervising employees.
       (2) The distribution of materials, merchandise or supplies 
     to maintain control of the flow of and expenditures for such 
     items is directly and closely related to the performance of 
     exempt duties.
       (3) A supervisor who spot checks and examines the work of 
     subordinates to determine whether they are performing their 
     duties properly, and whether the product is satisfactory, is 
     performing work which is directly and closely related to 
     managerial and supervisory functions, so long as the checking 
     is distinguishable from the work ordinarily performed by a 
     nonexempt inspector.
       (4) A supervisor who sets up a machine may be engaged in 
     exempt work, depending upon the nature of the industry and 
     the operation. In some cases the setup work, or adjustment of 
     the machine for a particular job, is typically performed by 
     the same employees who operate the machine. Such setup work 
     is part of the production operation and is not exempt. In 
     other cases, the setting up of the work is a highly skilled 
     operation which the ordinary production worker or machine 
     tender typically does not perform. In large plants, non-
     supervisors may perform such work. However, particularly in 
     small plants, such work may be a regular duty of the 
     executive and is directly and closely related to the 
     executive's responsibility for the work performance of 
     subordinates and for the adequacy of the final product. Under 
     such circumstances, it is exempt work.
       (5) A department manager in a retail or service 
     establishment who walks about the sales floor observing the 
     work of sales personnel under the employee's supervision to 
     determine the effectiveness of their sales techniques, checks 
     on the quality of customer service being given, or observes 
     customer preferences is performing work which is directly and 
     closely related to managerial and supervisory functions.
       (6) A business consultant may take extensive notes 
     recording the flow of work and materials through the office 
     or plant of the client; after returning to the office of the 
     employer, the consultant may personally use the computer to 
     type a report and create a proposed table of organization. 
     Standing alone, or separated from the primary duty, such 
     note-taking and typing would be routine in nature. However, 
     because this work is necessary for analyzing the data and 
     making recommendations, the work is directly and closely 
     related to exempt work. While it is possible to assign note-
     taking and typing to nonexempt employees, and in fact it is 
     frequently the practice to do so, delegating such routine 
     tasks is not required as a condition of exemption.
       (7) A manager who makes and administers the budget policy 
     of the employing office, establishes spending limits for the 
     employing office, and authorizes expenditures would be 
     performing work exempt under Sec. 541.200. Work that is 
     directly and closely related to these exempt duties may 
     include checking the status of accounts to determine whether 
     the credit limit would be exceeded by the shipment of a new 
     order, removing credit reports from the files for analysis, 
     and writing letters giving credit data and experience to 
     other employers or credit agencies.
       (8) A traffic manager in charge of planning a company's 
     transportation, including the most economical and quickest 
     routes for shipping merchandise to and from the plant, 
     contracting for common-carrier and other transportation 
     facilities, negotiating with carriers for adjustments for 
     damages to merchandise, and making the necessary 
     rearrangements resulting from delays, damages or 
     irregularities in transit, is performing exempt work. If the 
     employee also spends part of the day taking telephone orders 
     for local deliveries, such order-taking is a routine function 
     and is not directly and closely related to the exempt work.
       (9) An example of work directly and closely related to 
     exempt professional duties is a chemist performing menial 
     tasks such as cleaning a test tube in the middle of an 
     original experiment, even though such menial tasks can be 
     assigned to laboratory assistants.
       (10) A teacher performs work directly and closely related 
     to exempt duties when, while taking students on a field trip, 
     the teacher drives a school van or monitors the students' 
     behavior in a restaurant.

[[Page H1017]]

       The use of manuals, guidelines or other established 
     procedures containing or relating to highly technical, 
     scientific, legal, financial or other similarly complex 
     matters that can be understood or interpreted only by those 
     with advanced or specialized knowledge or skills does not 
     preclude exemption under section 13(a)(1) of the Act or the 
     regulations in this part. Such manuals and procedures provide 
     guidance in addressing difficult or novel circumstances and 
     thus use of such reference material would not affect an 
     employee's exempt status. The section 13(a)(1) exemptions are 
     not available, however, for employees who simply apply well-
     established techniques or procedures described in manuals or 
     other sources within closely prescribed limits to determine 
     the correct response to an inquiry or set of circumstances.
       The executive, administrative, professional, and computer 
     employee exemptions do not apply to employees training for 
     employment in an executive, administrative, professional, or 
     computer employee capacity who are not actually performing 
     the duties of an executive, administrative, professional, or 
     computer employee.
       (a) An exempt employee will not lose the exemption by 
     performing work of a normally nonexempt nature because of the 
     existence of an emergency. Thus, when emergencies arise that 
     threaten the safety of employees, a cessation of operations 
     or serious damage to the employer's property, any work 
     performed in an effort to prevent such results is considered 
     exempt work.
       (b) An ``emergency'' does not include occurrences that are 
     not beyond control or for which the employer can reasonably 
     provide in the normal course of business. Emergencies 
     generally occur only rarely, and are events that the employer 
     cannot reasonably anticipate.
       (c) The following examples illustrate the distinction 
     between emergency work considered exempt work and routine 
     work that is not exempt work:
       (1) Reserved.
       (2) Assisting nonexempt employees with their work during 
     periods of heavy workload or to handle rush orders is not 
     exempt work.
       (3) Replacing a nonexempt employee during the first day or 
     partial day of an illness may be considered exempt emergency 
     work depending on factors such as the size of the location 
     and of the executive's department, the nature of the work 
     performed by the employing office, the consequences that 
     would flow from the failure to replace the ailing employee 
     immediately, and the feasibility of filling the employee's 
     place promptly.
       (4) Regular repair and cleaning of equipment is not 
     emergency work, even when necessary to prevent fire or 
     explosion; however, repairing equipment may be emergency work 
     if the breakdown of or damage to the equipment was caused by 
     accident or carelessness that the employer could not 
     reasonably anticipate.
       Occasional, infrequently recurring tasks that cannot 
     practicably be performed by nonexempt employees, but are the 
     means for an exempt employee to properly carry out exempt 
     functions and responsibilities, are considered exempt work. 
     The following factors should be considered in determining 
     whether such work is exempt work: Whether the same work is 
     performed by any of the exempt employee's subordinates; 
     practicability of delegating the work to a nonexempt 
     employee; whether the exempt employee performs the task 
     frequently or occasionally; and existence of an industry 
     practice for the exempt employee to perform the task.
       Employees who perform a combination of exempt duties as set 
     forth in the regulations in this part for executive, 
     administrative, professional, and computer employees may 
     qualify for exemption. Thus, for example, an employee whose 
     primary duty involves a combination of exempt administrative 
     and exempt executive work may qualify for exemption. In other 
     words, work that is exempt under one section of this part 
     will not defeat the exemption under any other section.
       (a) An employee who otherwise meets the salary basis 
     requirements of Sec. 541.602 shall not be disqualified from 
     exemption under Sec. Sec. 541.100, 541.200, 541.300 or 
     541.400 on the basis that such employee is paid according to 
     a pay system established by statute, ordinance or regulation, 
     or by a policy or practice established pursuant to principles 
     of public accountability, under which the employee accrues 
     personal leave and sick leave and which requires the 
     employee's pay to be reduced or such employee to be placed on 
     leave without pay for absences for personal reasons or 
     because of illness or injury of less than one work-day when 
     accrued leave is not used by an employee because:
       (1) Permission for its use has not been sought or has been 
     sought and denied;
       (2) Accrued leave has been exhausted; or
       (3) The employee chooses to use leave without pay.
       (b) Deductions from the pay of an employee for absences due 
     to a budget-required furlough shall not disqualify the 
     employee from being paid on a salary basis except in the 
     workweek in which the furlough occurs and for which the 
     employee's pay is accordingly reduced.

                          ____________________