Exempt employee in PR: the threshold is $455, not $684

Puerto Rico has its own threshold, and it is lower

Almost everything written about exempt employees repeats the figure of **$684 a week**. For Puerto Rico **that is not the figure**.

The U.S. Department of Labor publishes the salary thresholds for the executive, administrative and professional exemption on its salary levels page, and there a separate row appears: **«Special Salary Level for Employees in Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands: $455 per week (equivalent to a $23,660 annual salary)»**.

The difference is not cosmetic. It means that in Puerto Rico an employer can classify as exempt (and therefore not pay time and a half over 40 hours) someone earning considerably less than would be required in a state. And it also means that **if you earn less than $455 a week, the salary requirement is not met** and the exemption cannot apply to you by that route, whatever you do.

That same page carries other figures worth having at hand:

And a note the page itself adds: **these salary thresholds do not apply to certain types of employees, among them doctors, lawyers, teachers and outside sales employees**.

• **Standard salary level** (the states'): **$684 per week**, equivalent to **$35,568** a year.
• **Puerto Rico, Guam, the U.S. Virgin Islands and the Northern Marianas:** **$455 per week**, equivalent to **$23,660** a year.
• **Highly compensated employees:** **$107,432 a year**, including at least **$684 per week** paid on a salary or fee basis.
• **American Samoa:** **$380 per week**, equivalent to **$19,760** a year.
• **Motion picture industry:** special base rate of **$1,043 per week**, or a proportionate amount based on days worked.
• **Computer employees paid hourly:** **$27.63 per hour**.

Salary alone does not make you exempt

This is the confusion that costs the most money. Clearing the salary threshold does **not** make anyone exempt: it is only one of the requirements.

Section 13(a)(1) of the **Fair Labor Standards Act**, developed in **Part 541 of Title 29 of the Code of Federal Regulations**, requires that **all** the requirements be met at once: that you be paid **on a salary basis**, that the salary reach **the level** applicable to your jurisdiction, and that your **actual duties** fit one of the categories. If any one fails, there is no exemption.

And there is a sentence the Department of Labor repeats in fact sheet after fact sheet, because it is where the most abuse happens: **«job titles do not determine exemption status»**. Being called «manager» on your appointment letter does not take away your overtime. What decides is what you do.

One more detail on the salary side: the employer **may use nondiscretionary bonuses and incentive payments (including commissions) paid annually or more frequently to satisfy up to ten percent (10%) of the standard salary level**.

Executive exemption: the four requirements

Department of Labor fact sheet **17B**, revised **August 2024**, lists what the employer must ensure to classify someone as an exempt executive. There are four, and **all must be met**:

Each term has a definition, and that is where many classifications fall apart:

**«Primary duty»** means the principal, main, major or most important duty the employee performs; it is determined on all the facts of the case, with the major emphasis on **the character of the job as a whole**.

**«Management»** includes, among other things: interviewing, selecting and training employees; setting and adjusting their pay rates and hours; directing their work; maintaining production or sales records for supervision or control; appraising productivity and efficiency to recommend promotions or other status changes; handling complaints and grievances; disciplining; planning the work; determining the techniques to be used; apportioning the work; determining materials, equipment or merchandise; controlling the flow of materials; providing for the safety of employees or property; planning and controlling the budget; and monitoring or implementing legal compliance measures.

**«Customarily recognized department or subdivision»** is meant to distinguish between a **mere collection of employees** assigned from time to time to a job, and **a unit with permanent status and function**.

**«Customarily and regularly»** means **greater than occasional but less than constant**: it includes work normally done every workweek, but **not** isolated or one-time tasks.

**«Two or more»** means two full-time employees or their equivalent, one full-time and two half-time employees equal two full-time. The fact sheet gives the exact example: **a department with five full-time nonexempt workers may have up to two exempt supervisors**, if each supervisor directs the work of two of those workers.

**«Particular weight»** for recommendations: factors include whether making such recommendations is part of your duties and how often they are made, requested and relied upon. They generally must pertain to employees you customarily and regularly direct. **It does not include occasional suggestions.** And there may be particular weight even if a higher-level manager's recommendation carries more importance.

• That they be compensated **on a salary basis** at the standard salary level required by 29 CFR 541.600, the one applicable to their jurisdiction.
• That their **primary duty** be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise.
• That they **customarily and regularly direct the work of two or more** full-time employees or their equivalent.
• That they have **authority to hire or fire**, or that their suggestions and recommendations on hiring, firing, advancement, promotion or any other change of status **be given particular weight**.

Administrative exemption: the «independent judgment» one

Fact sheet **17C**, also revised in August 2024, requires three things:

**«Directly related to management or general business operations»** means work directly related to **assisting with the running or servicing of the business**, as distinguished, the fact sheet says expressly, from working on a **production line** or **selling a product in a retail or service establishment**. It includes functional areas such as tax, finance, accounting, budgeting, auditing, insurance, quality control, purchasing, procurement, advertising, marketing, research, safety and health, personnel management, human resources, employee benefits, labor relations, public relations, government relations, computer network, Internet and database administration, legal and regulatory compliance, and similar activities.

It also counts if your primary duty is doing that kind of work **for your employer's customers**: the fact sheet names those acting as advisors or consultants to the employer's clients, such as tax experts or financial consultants.

**«Discretion and independent judgment»** is the most litigated requirement, and the fact sheet defines it: it involves **comparing and evaluating possible courses of conduct and acting or deciding** after considering the possibilities, with **authority to make an independent choice free from immediate direction or supervision**. Factors include whether you have authority to formulate, affect, interpret or implement management policies or operating practices; whether you carry out major assignments; whether your work affects operations to a substantial degree; whether you have authority to commit the employer in matters of significant financial impact; and whether you can waive or deviate from established policies without prior approval.

Two clarifications the fact sheet adds, cutting both ways: **the fact that your decisions are revised or reversed afterward does not mean you are not exercising discretion and independent judgment**; but that exercise must be **more than the use of skill in applying well-established techniques**.

• That they be compensated **on a salary or fee basis** at the applicable salary level.
• That their **primary duty** be office or non-manual work **directly related to the management or general business operations** of the employer or its customers.
• That that primary duty **include the exercise of discretion and independent judgment with respect to matters of significance**.

Professional exemption: the degree is not everything, but almost

Fact sheet **17D** distinguishes two types: the **learned professional** and the **creative professional**. For the learned one, all of the following must be met:

**«Work requiring advanced knowledge»** means predominantly intellectual work that includes the consistent exercise of discretion and judgment; it is distinguished from routine mental, manual, mechanical or physical work. And the fact sheet draws a hard line: **advanced knowledge cannot be attained at the high school level**.

**«Field of science or learning»** includes law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy, and other occupations with recognized professional status, distinguishable from the mechanical arts or skilled trades where the knowledge may be fairly advanced but is **not** in a field of science or learning.

**«Customarily acquired by a prolonged course of specialized intellectual instruction»** restricts the exemption to professions where specialized academic training is a **standard prerequisite** for entry. The academic degree is the best evidence; but «customarily» means it may apply to someone with substantially the same knowledge level doing substantially the same work as degreed employees, having acquired it through a combination of experience and instruction. And here is the limit that decides many cases: **the exemption does not apply to occupations in which most employees acquire their skill by experience rather than by advanced specialized intellectual instruction**.

• Compensation **on a salary or fee basis** at the applicable salary level.
• That the **primary duty** be work requiring **advanced knowledge**, defined as predominantly intellectual and including the consistent exercise of discretion and judgment.
• That the advanced knowledge be in a **field of science or learning**.
• That the knowledge be **customarily acquired by a prolonged course of specialized intellectual instruction**.

Those who cannot be exempt, no matter what they earn

There is an entire category to which these exemptions **never apply**, and it is in **29 C.F.R. § 541.3**, summarized in fact sheet **17I**.

The Section 13(a)(1) exemptions **do not apply to manual laborers or other «blue-collar» workers** who perform work involving **repetitive operations with their hands, physical skill and energy**, and who gain the skills for their routine manual and physical work through **apprenticeships and on-the-job training**.

The fact sheet says it plainly: FLSA-covered **non-management** employees in production, maintenance, construction and similar occupations (**carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers**) are entitled to minimum wage and overtime premium pay under the FLSA, and are **not exempt** under Section 13(a)(1) nor under Part 541, **«no matter how highly paid they might be»**.

That last phrase is the one to quote when a well-paid mechanic is told that is why they are «exempt». High pay does not create the exemption.

And on the Puerto Rico law side

All of the above is **federal law**. Puerto Rico also has its own workday statute, **Act 379 of 1948**, which likewise excludes from its provisions those holding **executive, administrative and professional** positions, but **with its own definitions**, which are not in the statute but in a regulation of the local Department of Labor.

**We have not been able to verify that regulation**, so this guide **does not describe the local test**. It is not a minor detail: they are two different analyses, and one cannot assume they give the same result. If your case turns on that, the question goes to DTRH's Bureau of Labor Standards, and ask for the answer with the regulation's citation.

What you can do with what is verified: check your situation against **the complete federal test**. If you fail any of its requirements (the salary does not reach $455 a week, your actual duties do not fit, or you do repetitive manual work) the federal exemption does not apply to you, and that part does not depend on any local regulation.

What we did not verify

**The federal regulation's text.** The figures and tests in this guide come from the Department of Labor's **salary levels page** and its **fact sheets 17A through 17D and 17I**, which are official agency documents. The text of **Part 541** lives at `ecfr.gov`, which **is not reachable from our side**, so we do not cite its provisions beyond what the fact sheets reproduce.

**The revision dates do not match across fact sheets, and that is worth knowing.** Fact sheets **17B, 17C and 17D are revised to August 2024** and no longer **carry a figure**: they point to 29 CFR 541.600 and to the salary levels page. Fact sheets **17A and 17I are revised to September 2019** and still repeat the $684. That is why **the figure we use here comes from the salary levels page**, which the fact sheets themselves point to as the current source.

**The local regulation** defining executive, administrative and professional for Act 379. Not located.

**Your classification.** This guide explains the tests; it classifies nobody. If you think you are misclassified, the U.S. Department of Labor itself maintains a Wage and Hour Division helpline, and in Puerto Rico there is also the Act 2 of 1961 summary procedure we explain in another guide.