GENERAL LAWS AND INFORMATION
Exemption for Administrative Employees
Employees who fall within the “administrative exemption” are exempt from both the minimum wage and overtime pay requirements under the FLSA. In order to satisfy this exemption, several requirements must all be met:
First, the employee is paid on a salary or fee basis at a rate not less than $913.00 per week (or $455 per week before December 1, 2016).
Second, the employee’s primary duties include performing office work or non-manual work directly related to management or general business operations of the employer or the employer’s customers.
Primary duty means the employee’s main, principal, or most important duty performed. This determination is made when viewing the totality of circumstances—examining the employee’s job as a whole. Directly related refers to work that is directly related to assisting in the running of the business. Work “directly related to management or general business operations” can include the following non-exhaustive list of tasks: tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; advertising; marketing; research; safety and health; and/or personnel management.
Third, the employee’s primary duties involve the exercise of discretion and independent judgment on matters of significance. Matters of significance refer to the level of importance or consequence of the task. However, risk of financial loss alone is not determinative.
If all requirements are satisfied, the employee is considered “exempt” from the minimum wage and overtime requirements of the FLSA.
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