Wage exemption guidelines

A knowledge of the wage exemption guidelines is useful for deciding whether an employee should be entitled to payment in wages or on a salaried basis. Doing so can avoid complaints at a later date, if an employee believes that he or she was unfairly compensated. The essential guidelines for designating an employee as eligible for salaried compensation are:

  • Administrative position. This person is responsible for an administrative department, even if there is no direct supervision of anyone. This classification also applies to anyone who assists with long-term strategic decision-making.

  • Executive position. This person is responsible for managing more than half the time, and supervises two or more employees.

  • Professional position. This person spends at least half of his or her time on tasks that call for knowledge that is obtained through a four-year college degree program; this requirement can include systems analysis, design, and programming, even in the absence of a four-year degree program. Someone classified as a professional must be able to exercise independent decision making, and require only a minimal amount of close supervision.

Related Courses

How to Audit Payroll
Optimal Accounting for Payroll
Payroll Management