Exemption from the Fair Labor Standards Act’s minimum wage and overtime requirements under Section 13(a)(1) turns on three separate tests under the general rule for the executive, administrative, and professional exemptions, and an employee must clear all three — not just one or two — to qualify as exempt under that general rule. The first, salary basis, asks how the employee is paid: on a predetermined amount each pay period that is not reduced for variations in the quality or quantity of the work performed. Administrative and professional employees may instead satisfy this requirement on a fee basis — an agreed sum for a single job, regardless of the time the job takes, as § 541.605 provides — though the executive exemption requires salary basis specifically (§ 541.100(a)(1)). The second, salary level, asks how much: a rate of not less than $684 per week, exclusive of board, lodging, or other facilities. The third, primary duty, asks what the employee actually does: whether the “principal, main, major or most important duty that the employee performs” is itself exempt executive, administrative, or professional work — see Chapter 3 for what qualifies as exempt work in each of those categories. Each test is independent of the other two, and each has its own regulation — § 541.602 for salary basis, § 541.600 for salary level, § 541.700 for primary duty. The regulations carve a few categories out of the general rule: a business owner who holds a bona fide 20-percent equity interest (bona fide meaning genuine and real, not a sham arrangement) and is actively engaged in management (§ 541.101), a teacher (§ 541.303(d)), and a practicing lawyer or doctor (§ 541.304(d)) are excused from the salary basis and salary level tests entirely — for these employees, exemption still requires the qualifying duties, but not a particular form or amount of pay.

Because the three requirements are independent, an employee can fail the exemption by missing just one of them even while comfortably meeting the other two. An employee paid $684 per week on a genuine salary basis still is not exempt if their principal duty is nonexempt work rather than executive, administrative, or professional work. Equally, an employee whose primary duty and pay rate both look exempt can lose the exemption if the employer’s pay practices break the salary basis test — for example, by docking pay for a partial-day absence or for a day when work simply was not available, rather than only in the specific circumstances the regulations permit. Salary basis is a matter of how pay is actually structured and administered, not merely how it is labeled, so a written policy calling someone “salaried” does not by itself satisfy the test.

Checking the three requirements methodically, rather than assuming that a high salary or an impressive title settles the question, is the most reliable way to answer whether a given position is exempt. Salary level is the easiest to verify because it is a fixed dollar figure. Salary basis requires looking at actual pay practices over time, including how deductions have been handled. Primary duty requires the most judgment, since the regulations direct an examination of all the facts in a particular case, with the character of the job as a whole carrying more weight than any single factor or a fixed percentage of time.