Salaried or Hourly? Part 2

Salaried or Hourly? Part 2 by Alan Krystal

{3:00 minutes to read} In Part 1 on how to designate whether an employee is salaried or hourly, I discussed the upcoming changes that will go into effect December 1, 2016, and the significance of those changes. I also began listing the five stated exemptions into which an employee must fall in order to be considered exempt. This article covers the 4th and 5th exemptions listed in the new rule.

4. Sales exemption

•The employee must have the primary duty to make and be making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.

•The employee must be customarily and regularly engaged away from the employer’s place or places of business.

•The salary requirements do not apply, as outside sales employees are not subject to the salary basis or salary level requirements.

5. Computer Employee exemption

The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field, with the primary duties of:

1. The application of systems analysis techniques and procedures, including consulting with users to determine hardware-, software- or system-functional specifications;

2. 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;

3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment.

Employers seeking to protect the exempt status of an employee, in addition to making sure that the employee is paid above the salary threshold, should have in place job descriptions that comply with the requirements of the above exemptions. These descriptions should be comprehensive and given to each employee so that there is no ambiguity in the event that the exempt status were to come under legal or administrative challenge.

The new rule is a significant development that bears watching. Every employer planning for 2017 should take these changes into consideration.

Have questions about how this memorandum might affect your business? Feel free to leave a comment in the box below, or give us a call at 631-780-6555.

Alan Krystal


Alan Krystal

Alan H. Krystal, P.C.
631 780 6555