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.