>Kells, supervisory and managerial employees are exempt from the FLSA, but
>so are other groups, e.g., farm laborers (which is why child labor is OK
>among migrants), food service employees, etc. I never heard of the
>distinction you mention, whether the employee actually creates a product.
It sounds as though someone has conflated some of the rationale for contract service with the rationale for the exempt status of some other labor.
Independent contractors are exempt from payroll (FLSA?) and there has been recent abuse of the guidelines for establishing independent contractor status. The guidelines have to do with the method that the contractor uses to deliver an agreement. Generally speaking, an independent contractor provides tools, labor and process to deliver an item/product.
Many tech companies used the exemption to carry programmers as independent contractors while they were actually employees, using the employers equipment, workspace and complying with the employers working hours.
Martin