The downside to being paid by the salary:

Exempt Job Duties
The third test for exemption status concerns the type of work an employee performs. As a rule of thumb, exempt employees tend to perform relatively high-level duties with respect to the company's overall operations (regardless of job title). The FLSA breaks this out into three main categories: executive, professional and administrative.

Exempt Job Duties: Executive
An employee is exempt from FLSA rules as an executive if he or she regularly performs all of the following:

Supervises two or more other employees
Primary duty of the position is management
Has genuine input into other employees' job status (hiring, firing, assignments, etc.)
This determination is made on a case-by-case basis, as each duty leaves room for interpretation. As a rule of thumb, an employee working exempt executive duties is "in charge" or considered "the boss."

Exempt Job Duties: Professional
Exempt professional employees include lawyers, physicians, teachers, architects, registered nurses and other employees performing work requiring advanced education or training. These typically are intellectual jobs requiring specialized education and involving the use of discretion and judgment. This exemption does not include skilled trades, mechanical arts or other work that does not require a college or postgraduate degree.

This exemption also includes creative professionals such as writers, journalists, actors and musicians. Typically, such jobs require imagination, talent and some unique contribution to the employer.

Exempt Job Duties: Administrative
This exemption is for employees whose main duties involve the support of the business, such as human resource staff, public relations or payroll and accounting. As a rule of thumb, administrative employees do not directly produce what the company sells; however, they are at a much higher level than those performing simple clerical work.

The FLSA defines exempt administrative job duties as follows:

(a) office or nonmanual work, which is

(b) directly related to management or general business operations of the employer or the employer's customers, and

(c) a primary component of which involves the exercise of independent judgment and discretion about

(d) matters of significance.