Are Your Creative Professional Employees Exempt from Overtime?

Part V in My Series for Founders

(You can find the other parts to this series, here.)

Now we move on to the second of the two general types of what is known as the “professional employee” exemption. This exemption applies to those employees referred to as “creative” professionals. As I discuss below, the availability of this exemption often comes down to what types of “creative” work the employee regularly performs.

Compared to most of the exemptions I’ve already discussed, the requirements for this exemption are relatively simple. To qualify for the creative professional employee exemption, both of the following tests must be met:

• The employee must be compensated on a salary or “fee basis” at a rate not less than $455 per week; and

• The 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.

Once again, it’s critical for employers to be careful to not jeopardize, even inadvertently, an employee’s salaried status by taking actions such as making improper deductions from an employee’s established salary.

I’ve also explained in previous posts what is meant by the term “fee basis” in the first test.

The first set of key terms in the second test is “invention, imagination, originality or talent”. What exactly does this mean? What is sufficient to meet this test? The DOL points out that this does not include work that simply “depends on intelligence, diligence and accuracy.” More is required to go beyond mere routine work to make it the type of work contemplated by the DOL in this test. Not surprisingly, the DOL also recognizes that this determination, like most of the others we’ve discussed, “must be determined on a case-by-case basis.” Although not necessarily applicable to many startups, the DOL offers the following examples of positions that typically satisfy this test, which might at least be helpful — actors, musicians, composers, soloists, certain painters, writers, journalists, cartoonists, essayists and novelists.

A recognized field of artistic or creative endeavor is easier to get our arms around when looking at the work employees perform. The DOL offers as examples the fields of music, writing, acting and the graphic arts. At the very least, the fields of writing and graphic arts are common within the startup community.

Finally, for those startups that employ either lawyers or physicians, an employee who is properly licensed or certified to practice law or medicine is exempt if the employee is actually engaged in such a practice. Although the first test is not likely to be an issue regarding these employees, it does not apply to those who are actually practicing law or medicine.

My next post will describe what’s necessary to meet the requirements of the FLSA’s computer employee exemption.

We’re in the homestretch!

The information contained in this post should not be considered legal advice, nor does it establish an attorney-client relationship between the author and the reader. Readers should to seek the advice of legal counsel before taking any action based upon the content of this post.