5 C.F.R. Subpart B—Exemptions and Exclusions
Title 5 - Administrative Personnel
Title 5: Administrative Personnel
PART 551—PAY ADMINISTRATION UNDER THE FAIR LABOR STANDARDS ACT
Subpart B—Exemptions and Exclusions
Source: 62 FR 67247, Dec. 23, 1997, unless otherwise noted.
§ 551.201 Agency authority.
The employing agency may designate an employee FLSA exempt only when the agency correctly determines that the employee meets one or more of the exemption criteria of this subpart and such supplemental interpretations or instructions issued by OPM.
§ 551.202 General principles governing exemptions.
In all exemption determinations, the agency must observe the following principles:
(a) Each employee is presumed to be FLSA nonexempt unless the employing agency correctly determines that the employee clearly meets one or more of the exemption criteria of this subpart and such supplemental interpretations or instructions issued by OPM.
(b) Exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption.
(c) The burden of proof rests with the agency that asserts the exemption.
(d) An employee who clearly meets the criteria for exemption must be designated FLSA exempt. If there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee should be designated FLSA nonexempt.
(e) There are groups of General Schedule employees who are FLSA nonexempt because they do not fit any of the exemption categories. These groups include the following:
(1) Nonsupervisory General Schedule employees in equipment operating and protective occupations, and most clerical occupations (see the definition of participation in the executive or administrative functions of a management official in subpart A of this part);
(2) Nonsupervisory General Schedule employees performing technician work in positions properly classified below GS–9 (or the equivalent level in other comparable white-collar pay systems) and many, but not all, of those positions properly classified at GS–9 or above (or the equivalent level in other comparable white-collar pay systems); and
(3) Nonsupervisory General Schedule employees at any grade level in occupations requiring highly specialized technical skills and knowledges that can be acquired only through prolonged job training and experience, such as the Air Traffic Control series, GS–2152, or the Aircraft Operations series, GS–2181, unless such employees are performing predominantly administrative functions rather than the technical work of the occupation.
(f) Although separate criteria are provided for the exemption of executive, administrative, and professional employees, those categories are not mutually exclusive. All exempt work, regardless of category, must be considered. The only restriction is that, when the requirements of one category are more stringent, the combination of exempt work must meet the more stringent requirements.
(g) Failure to meet the criteria for exemption under what might appear to be the most appropriate criteria does not preclude exemption under another category. For example, an engineering technician who fails to meet the professional exemption criteria may be performing exempt administrative work, or an administrative officer who fails to meet the administrative criteria may be performing exempt executive work.
(h) Although it is normally feasible and more convenient to identify the exemption category, this is not essential. An exemption may be based on a combination of functions, no one of which constitutes the primary duty, or the employee's primary duty may involve two categories which are intermingled and difficult to segregate. This does not preclude designating an employee FLSA exempt, provided the work as a whole clearly meets the other exemption criteria.
(i) The designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee.
§ 551.203 Exemption of General Schedule employees.
(a) GS–4 or below. Any employee in a position properly classified at GS–4 or below (or the equivalent level in other comparable white-collar pay systems) is nonexempt, unless the employee is subject to the foreign exemption in §551.209.
(b) GS–5 or above. Any employee in a position properly classified at GS–5 or above (or the equivalent level in other comparable white-collar pay systems) is exempt only if the employee is an executive, administrative, or professional employee as defined in this subpart, unless the employee is subject to §551.208 (the effect of performing temporary work or duties on FLSA exemption status) or §551.209 (the foreign exemption).
§ 551.204 Exemption of Federal Wage System employees.
(a) Nonsupervisory. A nonsupervisory employee in the Federal Wage System or in other comparable wage systems is nonexempt, unless the employee is subject to §551.208 (the effect of performing temporary work or duties on FLSA exemption status) or §551.209 (the foreign exemption).
(b) Supervisory. A supervisory employee in the Federal Wage System or in other comparable wage systems is exempt only if the employee is an executive employee as defined in §551.205, unless the employee is subject to §551.208 (the effect of performing temporary work or duties on FLSA exemption status) or §551.209 (the foreign exemption).
§ 551.205 Executive exemption criteria.
An executive employee is a supervisor or manager who manages a Federal agency or any subdivision thereof (including the lowest recognized organizational unit with a continuing function) and customarily and regularly directs the work of subordinate employees and meets both of the following criteria:
(a) Primary duty test. The primary duty test is met if the employee—
(1) Has authority to make personnel changes that include, but are not limited to, selecting, removing, advancing in pay, or promoting subordinate employees, or has authority to suggest or recommend such actions with particular consideration given to these suggestions and recommendations; and
(2) Customarily and regularly exercises discretion and independent judgment in such activities as work planning and organization; work assignment, direction, review, and evaluation; and other aspects of management of subordinates, including personnel administration.
(b) 80-percent test. In addition to the primary duty test that applies to all employees, the following employees must spend 80 percent or more of the worktime in a representative workweek on supervisory and closely related work to meet the 80-percent test:
(1) Employees in positions properly classified in the General Schedule at GS–5 or GS–6 (or the equivalent level in other comparable white-collar pay systems);
(2) Firefighting or law enforcement employees in positions properly classified in the General Schedule at GS–7, GS–8, or GS–9 who are subject to section 207(k) of title 29, United States Code; and
(3) Supervisors in positions properly classified in the Federal Wage System below situation 3 of Factor I of the Federal Wage System Job Grading Standard for Supervisors (or the equivalent level in other comparable wage systems).
§ 551.206 Administrative exemption criteria.
An administrative employee is an advisor or assistant to management, a representative of management, or a specialist in a management or general business function or supporting service and meets all four of the following criteria:
(a) Primary duty test. The primary duty test is met if the employee's work—
(1) Significantly affects the formulation or execution of management programs or policies; or
(2) Involves management or general business functions or supporting services of substantial importance to the organization serviced; or
(3) Involves substantial participation in the executive or administrative functions of a management official.
(b) Nonmanual work test. The employee performs office or other predominantly nonmanual work which is—
(1) Intellectual and varied in nature; or
(2) Of a specialized or technical nature that requires considerable special training, experience, and knowledge.
(c) Discretion and independent judgment test. The employee frequently exercises discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
(d) 80-percent test. In addition to the primary duty test that applies to all employees, General Schedule employees in positions properly classified at GS–5 or GS–6 (or the equivalent level in other comparable white-collar pay systems) must spend 80 percent or more of the worktime in a representative workweek on administrative functions and work that is an essential part of those functions to meet the 80-percent test.
[62 FR 67247, Dec. 23, 1997; 63 FR 2304, Jan. 14, 1998]
§ 551.207 Professional exemption criteria.
A professional employee is an employee who meets all of the following criteria, or any teacher who is engaged in the imparting of knowledge or in the administration of an academic program in a school system or educational establishment.
(a) Primary duty test. The primary duty test is met if the employee's work consists of—
(1) Work that requires knowledge in a field of science or learning customarily and characteristically acquired through education or training that meets the requirements for a bachelor's or higher degree, with major study in or pertinent to the specialized field as distinguished from general education; or is performing work, comparable to that performed by professional employees, on the basis of specialized education or training and experience which has provided both theoretical and practical knowledge of the specialty, including knowledge of related disciplines and of new developments in the field; or
(2) Work in a recognized field of artistic endeavor that is original or creative in nature (as distinguished from work which can be produced by a person endowed with general manual or intellectual ability and training) and the result of which depends on the invention, imagination, or talent of the employee; or
(3) Work that requires theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering or other similar work in the computer software field. The work must consist of one or more of the following:
(i) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications; or
(ii) 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; or
(iii) The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
(iv) A combination of the duties described in paragraphs (a)(3)(i), (a)(3)(ii), and (a)(3)(iii) of this section, the performance of which requires the same level of skills.
(b) Intellectual and varied work test. The employee's work is predominantly intellectual and varied in nature, requiring creative, analytical, evaluative, or interpretative thought processes for satisfactory performance.
(c) Discretion and independent judgment test. The employee frequently exercises discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
(d) 80-percent test. In addition to the primary duty test that applies to all employees, General Schedule employees in positions properly classified at GS–5 or GS–6 (or the equivalent level in other comparable white-collar pay systems), must spend 80 percent or more of the worktime in a representative workweek on professional functions and work that is an essential part of those functions to meet the 80-percent test.
§ 551.208 Effect of performing temporary work or duties on FLSA exemption status.
(a) Applicability—(1)When applicable. This section applies only when an employee must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of the employee's official position description. The period of temporary work or duties may or may not involve a different geographic duty location. The FLSA exemption status of employees during a period of temporary work or duties must be determined as described in this section.
(2) When not applicable. This section does not apply when an employee is detailed to an identical additional position as the employee's position or to a position of the same grade, series code, basic duties, and FLSA exemption status as the employee's position.
(b) Effect on nonexempt employees. (1) A nonexempt employee who must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of the employee's official position description remains nonexempt for the entire period of temporary work or duties unless all three of the following conditions are met:
(i) 30-day test. The period of temporary work or duties exceeds 30 calendar days; and
(ii) Exempt work or duty. The employee's primary duty for the period of temporary work or duties is exempt work or duty as defined in this part; and
(iii) Positions at GS–7 or above, or at situation 3 or 4. The employee's position (including a position to which the employee is temporarily promoted) is properly classified in the General Schedule at GS–7 or above (or the equivalent level in other comparable white-collar pay systems) or properly classified in the Federal Wage System as a supervisor at situation 3 or 4 of Factor I of the Federal Wage System Job Grading Standard for Supervisors (or the equivalent level in other comparable wage systems).
(2) If a nonexempt employee becomes exempt under the criteria in paragraph (b)(1) of this section—
(i) The employee must be considered exempt for the entire period of temporary work or duties; and
(ii) If the employee received FLSA overtime pay for work performed during the first 30 calendar days of the temporary work or duties, the agency must recalculate the employee's total pay retroactive to the beginning of that period because the employee is now not entitled to the FLSA overtime pay received but may be owed title 5 overtime pay.
(c) Effect on exempt employees.(1) An exempt employee not covered by the special provision of paragraph (c)(3) of this section who must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of the employee's official position description remains exempt for the entire period of temporary work or duties unless all three of the following conditions are met:
(i) 30-day test. The period of temporary work or duties exceeds 30 calendar days; and
(ii) Not exempt work or duty. The employee's primary duty for the period of temporary work or duties is not exempt work or duty as defined in this part; and
(iii) Positions at GS–7 or above, or at situation 3 or 4. The employee's position (including a position to which the employee is temporarily promoted) is properly classified in the General Schedule at GS–7 or above (or the equivalent level in other comparable white-collar pay systems) or properly classified in the Federal Wage System as a supervisor at situation 3 or 4 of Factor I of the Federal Wage System Job Grading Standard for Supervisors (or the equivalent level in other comparable wage systems).
(2) If an exempt employee becomes nonexempt under the criteria in paragraph (c)(1) of this section—
(i) The employee must be considered nonexempt for the entire period of temporary work or duties; and
(ii) If the employee received title 5 overtime pay for work performed during the first 30 calendar days of the temporary work or duties, the agency must recalculate the employee's total pay retroactive to the beginning of that period because the employee may now not be entitled to some or all of the title 5 overtime pay received but may be owed FLSA overtime pay.
(3) Special provision for exempt employees at GS–5 or GS–6, or below situation 3. The exemption status of certain exempt employees who must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of their official position description must be determined on a workweek basis for the period of temporary work or duties. Such employees are exempt employees whose positions (including a position to which the employee is temporarily promoted) are properly classified in the General Schedule at GS–5 or GS–6 (or the equivalent level in other comparable white-collar pay systems), or are properly classified in the Federal Wage System below situation 3 of Factor I of the Federal Wage System Job Grading Standard for Supervisors (or the equivalent level in other comparable wage systems). The exemption status determination of these employees will result in the employee either remaining exempt or becoming nonexempt for that workweek, as described in paragraphs (c)(3)(i) and (c)(3)(ii) of this section.
(i) Remain exempt. An exempt employee remains exempt for a given workweek only if the employee performs exempt work or duties for 80 percent or more of the worktime in that workweek.
(ii) Become nonexempt. An exempt employee becomes nonexempt for a given workweek only if the employee performs nonexempt work or duties for more than 20 percent of the worktime in that workweek.
(d) Emergency situation. Notwithstanding any other provisions of this section, and regardless of an employee's grade level, the agency may determine that an emergency situation exists that directly threatens human life or safety, serious damage to property, or serious disruption to the operations of an activity, and there is no recourse other than to assign qualified employees to temporarily perform work or duties in connection with the emergency. In such a designated emergency—
(1) Nonexempt employee. The exemption status of a nonexempt employee remains nonexempt whether the employee performs nonexempt work or exempt work during the emergency; and
(2) Exempt employee. The exemption status of an exempt employee must be determined on a workweek basis. The exemption status determination of exempt employees will result in the employee either remaining exempt or becoming nonexempt for that workweek, as described in paragraphs (d)(2)(i) and (d)(2)(ii) of this section.
(i) Remain exempt. An exempt employee remains exempt for any workweek in which the employee performs exempt work or duties for 80 percent or more of the worktime in a given workweek.
(ii) Become nonexempt. An exempt employee becomes nonexempt for any workweek in which the employee performs nonexempt work or duties for more than 20 percent of the worktime in a given workweek.
[62 FR 67247, Dec. 23, 1997; 63 FR 2304, Jan. 14, 1998]
§ 551.209 Foreign exemption criteria.
(a) Application. When the foreign exemption applies, the minimum wage, overtime, and child labor provisions of the Act do not apply to any employee who spends all hours of work in a given workweek in an exempt area. When an employee meets one of the two criteria in paragraph (b) of this section, the foreign exemption applies until the employee spends any hours of work in any nonexempt area as defined in §551.102.
(b) Foreign exemption applies. If an employee meets one of the two following criteria, the employee is subject to the foreign exemption of the Act and the minimum wage, overtime, and child labor provisions of the Act do not apply:
(1) The employee is permanently stationed in an exempt area and spends all hours of work in a given workweek in one or more exempt areas; or
(2) The employee is not permanently stationed in an exempt area, but spends all hours of work in a given workweek in one or more exempt areas.
(c) Foreign exemption does not apply. For any given workweek, the minimum wage, overtime, and child labor provisions of the Act apply to an employee permanently stationed in an exempt area who spends any hours of work in any nonexempt area. For that workweek, the employee is not subject to the foreign exemption, and the agency must determine the exemption status of such an employee as described paragraphs (c)(1) and (c)(2) of this section. The foreign exemption does not resume until the employee again meets one of the criteria in paragraph (b) of this section.
(1) Same duties. If the duties performed during that workweek are consistent with the primary or grade-controlling duties of the employee's official position description, the agency must designate the employee the same FLSA exemption status as if the employee were permanently stationed in any nonexempt area.
(2) Different duties. If the duties performed during that workweek are not consistent with the primary or grade-controlling duties of the employee's official position description—
(i) The agency must first designate the employee the same FLSA exemption status as the employee would have been designated based on the duties included in the employee's official position description if the employee were permanently stationed in any nonexempt area; and
(ii) The agency must determine the employee's exemption status for that workweek by applying §551.208.
(d) Resumption of foreign exemption. When an employee returns to any exempt area from performing any hours of work in any nonexempt area, the employee is not subject to the foreign exemption until the employee meets one of the criteria in paragraph (b) of this section.
§ 551.210 Exemption of employees receiving availability pay.
The following employees are exempt from the hours of work and overtime pay provisions of the Act:
(a) A criminal investigator receiving availability pay under §550.181 of this chapter; and
(b) A pilot employed by the United States Customs Service who is a law enforcement officer as defined in section 5541(3) of title 5, United States Code, and who receives availability pay under section 5545a(i) of title 5, United States Code.
§ 551.211 Statutory exclusion.
A customs officer who receives overtime pay under subsection (a) or premium pay under subsection (b) of section 267 of title 19, United States Code, for time worked may not receive pay or other compensation for that work under any other provision of law. As used in section 5, the term “customs officer” means a United States Customs Service supervisory or nonsupervisory customs inspector or a supervisory or nonsupervisory canine enforcement officer.
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