Professional Employee

Reference Number: MTAS-927
Tennessee Code Annotated
Reviewed Date: July 27, 2018
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(NOTE: The U.S. District Court for the Eastern District of Texas issued a preliminary injunction preventing the implementation of the revised FLSA overtime regulations. The case was brought by 21 states. The Obama Administration appealed the decision to the U.S. Court of Appeals for the Fifth Circuit. The 5th Circuit Court of Appeals granted a motion of the Trump Administration for an additional 60 days to determine its position on the appeal of the ruling by the District Court enjoining the FLSA overtime regulation. The Administration's decision was initially due by May 1st, 2017. The 5th Circuit granted another extension until June 30th. The Labor Department filed a brief with the Fifth Circuit Court of Appeals indicating that it will not defend the $913 salary rate and asked the Court to clarify its ability to set a salary level. The department issued a request for public comments. Until we hear more, continue to comply with the old salary level testing regulations.)

The professional exemption of the FLSA actually covers two exemptions: one for “learned professionals” and one for “creative professionals.” An individual employed in a bona fide professional capacity is an employee:

  • Who is compensated on a salary or fee basis at a rate of not less than $455 per week, and
  • Whose primary duty is to perform work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction (29 C.F.R. § 300(a)(2)(i) or, requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. 29 C.F.R. § 541.300(a)(2)(ii).

To qualify as an exempt “learned professional,” an employee must have a primary duty that requires knowledge of an advanced type in a field of science or learning. DOL regulation 29 C.F.R. § 541.301(b) states “the phrase ‘work requiring advanced knowledge’ means work which is predominately intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment... Advanced knowledge cannot be attained at the high school level.” 29 C.F.R. § 541.301(b). Note that the employee cannot be exempt as a “learned professional” unless the employee’s work requires knowledge of an advanced type. Thus, an employee who has an advanced degree, but whose work does not require that level of education, will not qualify for the exemption.

Included within these requirements is a criterion that the employee’s primary duty must include the “consistent exercise of discretion and judgment.” The regulations do not define “discretion and judgment” as applied to the professional exemption except to say that an exempt learned professional generally uses his or her advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. DOL notes that the “exercise of discretion and judgment” standard under the learned professional exemption is less stringent than the “exercise of discretion and independent judgment” standard under the administrative exemption. 69 Fed. Reg. 22,151, citing De Jesus Rentas v. Baxter Pharmacy Services Corp., 286 F.Supp. 2d 235 (D.P.R. 2003).

“The phrase ‘field of science or learning’ includes the traditional professions of law, medicine, theology, accounting, actuarial computations, engineering, architecture, teaching, various types of physical, chemical and biological science, pharmacy and other similar occupations. The regulations specifically define “field of science or learning” as “occupations that have a recognized professional status as distinguished from the mechanical arts or skilled trades where in some instances the knowledge is of a fairly advanced type, but is not in a field of science or learning.” 29 C.F.R. § 541.301(c).

"The phrase ‘customarily acquired by a prolonged course of specialized intellectual instruction’ restricts the exemption to professions where specialized academic training is a standard prerequisite for entrance into the profession.” 29 C.F.R. § 541.301(d). The best evidence that an employee meets this requirement is possession of the appropriate academic degree. “The word, ‘customarily’ means that the exemption is also available to employees in such professions who have substantially the same knowledge level and perform substantially the same work as the degree employee, but who attained the advanced knowledge through a combination of work experience and intellectual instruction.” 29 C.F.R. § 541.301(d). The exemption is not available for “occupations in which most employees have acquired their skill by experience, rather than by advanced specialized intellectual instruction.” This does not allow an employee to qualify as exempt based on equivalent training in the military, technical schools or community colleges.

“To qualify for the creative professional exemption, an employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor as opposed to routine mental, manual, mechanical or physical work.” 29 C.F.R. § 541.302(a). “The work performed must be in a recognized field of artistic or creative endeavor. This includes such fields as music, writing, acting and the graphic arts.” 29 C.F.R. § 541.302(b). The exemption does not apply to work that can be produced by a person with general manual or intellectual ability and training. “This requirement is generally met by actors, musicians, composers, conductors, and soloists; painters who at most are given the subject matter of their painting; cartoonists who are merely told the title or underlying concept of a cartoon and must rely on their own creative ability to express the concept; essayists, novelists, short-story writers and screen-play writers who choose their own subjects and hand in a finished piece of work to their employers.” 29 C.F.R. § 541,302(c).

A professional employee who is “highly compensated” may qualify as an exempt professional worker under the DOL revised regulations (29 C.F.R. § 601(a); however, the duty test for a highly-compensated professional employee is stricter than the duty test for the other exemptions. Additionally, the salary requirements of this part does not apply to the teaching profession or to the practice of law or medicine 29 C.F.R. § 541,303(d) and 29 C.F.R. § 541,304(d).

 

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