Salary alone never makes anyone exempt. Each exemption pairs the salary test with its own duties test, and the duties tests are what this unit turns on.
Executive — 29 CFR 541.100
- Salary basis at $684 per week, and
- Primary duty is management of the enterprise or a customarily recognized department or subdivision, and
- Customarily and regularly directs the work of two or more other employees, and
- Authority to hire or fire, or recommendations given particular weight.
Administrative — 29 CFR 541.200
- Office or non-manual work directly related to management or general business operations of the employer or its customers, and
- The exercise of discretion and independent judgment with respect to matters of significance.
Stopping at "directly related to general business operations" and ignoring the discretion element is the standard error.
Professional — 29 CFR 541.300
Learned professional work requires advanced knowledge in a field of science or learning; creative professional work requires invention, imagination, originality or talent.
The salary basis rule — 29 CFR 541.602
A predetermined salary is a regularly received predetermined amount paid weekly or less frequently that cannot be reduced because of variations in the quality or quantity of work (DOL Fact Sheet #17G). An arrangement that averages out over time is not a guaranteed predetermined salary.
541.602(a)(3) allows up to 10% of the required $684 salary to be satisfied by nondiscretionary bonuses, incentives and commissions paid annually or more frequently — and it expressly does not apply to highly compensated employees. Trap answers overstate the percentage, drop the HCE carve-out, or deny the provision exists.
The classic misclassification
A billing clerk paid a guaranteed $700 per week who processes invoices against a fixed procedure manual, supervises no one and cannot deviate from procedure is nonexempt. She clears the $684 salary level but exercises no discretion and independent judgment on matters of significance. Treating salary alone as sufficient is the single most common classification error, and $700 is nowhere near the $107,432 HCE route.