Exempt Versus Nonexempt

• Employers classify employees as exempt or nonexempt, according to salary level, job duties, level of authority and the manner in which the employees perform their job duties. The primary distinction between exempt and nonexempt employees is that exempt employees do not receive overtime pay -- nonexempt employees receive overtime pay. Section 663 of Chapter 26 of the Maine Revised Statutes codifies the three exceptions that apply to employee exempt status. Employees who are considered administrative, executive or professional workers must meet specific guidelines for proper classification as exempt, under Maine state law and federal law.
  
  

Administrative Exemption

• There is a two-prong test for the administrative employee exemption under Maine state law. An employee who performs work that requires the use of independent judgment and discretion meets one prong of the test. Independent judgment and discretion generally means an employee relies on her own faculties to make decisions concerning professional matters. In addition to the use of independent judgment and discretion, an administrative employee must perform her duties in an academic or educational institution or in a business where she routinely follows protocol established by management policies or operational processes related to management of the business. The work, in this case, must be nonmanual to qualify for the administrative exemption.
  
  

Executive Exemption

• Maine state law concerning the executive exemption closely follows the federal law related to executive exemption under the FLSA. An executive employee is deemed exempt from overtime provisions when he regularly directs the work of at least two full-time employees or the equivalent of two full-time employees. The equivalent of two full-time employees in a job-sharing arrangement could be four employees who, when paired, fulfill two full-time positions. In addition, he should be in a management role for the overall company or in a management position within a department.
  
  

Professional Exemption

• Professional employees have a broader range of categories that may qualify them for exempt status under Maine's law for overtime provisions. Artistics or teachers or anyone whose expertise and job duties include advanced knowledge in the fields of science or education qualify for the professional exemption. In addition to the subject matter expertise and routine job duties for artists, teachers or employees in the educational field or the arts, these exempt employees must exercise independent judgment and discretion in the performance of their duties. Jobs that qualify as exempt under the professionals exemption include university instructors, studio artists, and elementary and secondary teachers.
  
  

Salary Test

• Employees who qualify for exemption from the Maine overtime provisions as well as the FLSA must meet the salary test. The minimum salary amount payable to employees for exempt status is $455 per week. This appears to be a relatively low salary given the executive, administrative and professional duties assigned to employees who qualify for exemption from overtime pay; however, $455 per week equals roughly $11.38 per hour, which is far above the federal minimum wage rate of $7.25 per hour, effective July 2010. Maine's hourly minimum wage is 25 cents higher than the federal minimum wage, and Maine's overtime wage is $11.25, which is lower than the salary test for exempt employees.