The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Highly Compensated Creative Exemption

Reference Number: MTAS-937
Tennessee Code Annotated
Reviewed Date: July 25, 2017
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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 has also issued a request for public comments.  Until we hear more, continue to comply with the old salary level testing regulations.)

Employees who meet the criteria below are bona fide highly compensated creative professional employees under DOL’s regulations.

  • Is the employee’s total annual non-discretionary compensation at least $100,000? (Effective December 1, the minimum salary level for highly compensated creative professional employees is at least $134,004.) 29 C.F.R. § 541.601(a).
  • Is the employee paid on a salary or fee basis a minimum of $455 per week exclusive of board, lodging or other facilities? (Effective December 1, 2016, the new minimum salary level is $913 per week exclusive of board, lodging or other facilities.) 29 C.F.R. § 541.601(b).
    • Is the employee paid on a salary basis? With certain limited exceptions he or she must:
      • Experience no reduction in salary for variations in the quality and quantity of work;
      • Experience no deduction for partial-day absences;
      • Receive each pay period a pre-determined amount constituting all or part of his or her compensation; or
      • Pay deductions are based on the principle of public accountability. 29 C.F.R. § 541.602.
    • Alternately, is the employee paid on a fee basis? 29 C.F.R. § 541.605.
  • Does the employee regularly and customarily perform one or more exempt professional duties involving work that requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. 29 C.F.R. § 541.302.