Is This Role Really Exempt? An FLSA Classification Audit

Start with the pay and duties tests

Review the work behind the title. Labels such as “manager,” “analyst,” and “salaried” do not establish an exemption. The white-collar exemptions all turn on three independent requirements, and the role must satisfy every one of them. Walk the tree top to bottom; the first “No” ends the inquiry and the role is non-exempt, unless that gate notes an exception.

Is the employee paid on a salary basis? A predetermined amount each pay period that doesn’t fluctuate with the quality or quantity of work. Watch for improper deductions — docking partial days, deducting for slow weeks, or treating “salary” as a draw against commissions can defeat the basis entirely.

Non-exempt, unless the role falls in one of the no-salary-test lanes noted under “Yes” or is a computer role paid hourly (see the next gate). Note that an actual practice of improper deductions can blow the exemption for everyone in that job classification working for the managers responsible, for the whole period of the deductions, not just the one paycheck — the safe-harbor policy and prompt reimbursement exist to contain exactly this.

Yes

Continue. (Outside sales, teachers, and certain licensed professionals such as practicing physicians and lawyers are not subject to the salary tests — if you’re in one of those lanes, skip to the duties gate.)

Does the salary meet the current minimum threshold? The federal salary level has changed repeatedly and has been actively litigated — figures set by rule have been raised, struck down, and reinstated. Do not rely on a number you remember. Confirm the threshold in effect today against the DOL’s current rule, and note that a separate, higher threshold applies to the highly-compensated-employee shortcut.

Non-exempt under the standard white-collar exemptions, regardless of duties. Below the line, what the person does is irrelevant. One exception worth checking: a computer-employee role can also qualify on an hourly basis at or above the regulatory hourly rate (confirm the current figure), so an hourly computer professional is not automatically disqualified here.

Yes

Continue to the duties test — the gate where most close calls are actually won or lost.

Does the employee’s primary duty fit one of the listed exemptions? “Primary duty” means the principal, main, or most important duty — judged by what the person actually does day to day, not what the job description says or what they’re paid to be available for.

Yes

Match it to a specific exemption using the reference table below, then proceed to the final state-law gate.

Non-exempt. A salary and a senior-sounding title cannot cure a duties mismatch. This is where assistant managers who mostly run a register, inside salespeople, and many help-desk roles fall out.

Is the role exempt under the law of every state where the employee works? Federal exemption is a floor, not a ceiling. Several states impose higher salary thresholds, narrower duties tests, or both — California’s quantitative “more than half the time on exempt work” test is the classic example, and remote workers can pull a role under a stricter state’s law unexpectedly.

Yes

Defensibly exempt — today, on these facts. Document the analysis and re-test when the role, the pay, or the law changes.

Treat as non-exempt for that jurisdiction. The stricter rule governs where the work is performed.

Matching the duty to the exemption

Each white-collar exemption has its own primary-duty test. The thumbnail below is for spotting the right category and the classic failure mode — not a substitute for the full regulatory standard, which carries its own defined elements.

Exemption	Core primary duty	Where it breaks
Executive	Manages the enterprise or a recognized unit; customarily directs the work of at least two other full-time employees (or the equivalent); and has genuine authority or weight in hiring and firing.	The “working manager” whose primary duty is the line work itself — stocking, serving, selling — with supervision as a side function.
Administrative	Office or non-manual work directly related to management or general business operations, and the exercise of discretion and independent judgment on matters of significance.	The most litigated exemption. Applying well-established procedures to routine matters is production or clerical work, not discretion — following a script or a rubric is not “independent judgment.”
Professional	Work requiring advanced knowledge in a field of science or learning, customarily acquired by a prolonged course of specialized instruction (learned); or work in a recognized artistic or creative field (creative).	Roles that need skill or experience but not a true advanced-degree-level body of knowledge. Paralegals are the recurring example — generally non-exempt despite the “professional” feel.
Computer	Systems analysis, programming, software engineering, or similar work performed at the level of skill the regulation defines.	Help-desk, installation, repair, and support roles that work from troubleshooting trees rather than designing or analyzing systems.
Outside sales	Making sales or obtaining orders, customarily and regularly away from the employer’s place of business. No salary tests apply.	Inside sales — selling from a phone or desk — does not qualify here (a separate retail commission exemption may, on its own narrow terms).

The self-audit

Run this on any role you’re unsure about, and on a rotating sample of exempt roles even when no one has complained. The goal is to find and fix problems on your own clock rather than the plaintiff’s.

Test the duties as actually performed. Interview incumbents or their managers; ask what fills the day, not what the job description claims. A description that no longer matches reality is the first exhibit in a misclassification case.
Confirm the current salary threshold. Check today’s federal figure and each applicable state figure against the operative rule — not last year’s memory. Flag anyone sitting just above the line, who is one threshold increase away from a problem.
Pressure-test the salary basis. Review actual deduction practice, not just policy. Confirm a written safe-harbor provision exists and that improper deductions are reimbursed promptly when caught.
Scrutinize the usual suspects. Assistant managers, “coordinators” and “administrators” doing routine work, inside sales, paralegals, and IT support are the recurring misclassifications. Give them a hard look first.
Track hours on the genuine close calls. For borderline roles, capturing actual hours worked sizes the exposure and informs the call — you cannot reclassify intelligently without knowing the overtime liability behind it.
Layer state law onto every multistate role. Map each position to every state where work is performed, including remote employees, and apply the stricter standard for that location.
Document the analysis as you go. A contemporaneous, reasoned classification memo — even a short one — supports a good-faith defense that can limit liquidated damages. A blank file does not.
Calendar a periodic re-audit. Roles drift, thresholds move, and duties tests get amended. A classification that was right two years ago may be wrong today without anyone changing a thing on purpose.

Before you reclassify anyone

Flipping a role to non-exempt is delicate precisely because it implies the prior classification was wrong — an inference a plaintiff would welcome. Many in-house teams find it useful to run the audit under privilege, quantify the back-pay exposure first, and plan the employee messaging and the timing before changing a single paycheck. The reclassification is rarely the hard part; the way you get there, and what the file says about why, is.