GENERAL LAWS AND INFORMATION
Exemption for Executive Employees
“Executive employees” 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 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 managing the business, or managing a recognized subdivision or department of the business. 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. Whether an employee manages an enterprise is determined by asking whether the employee engages in activities including, but not limited to, interviewing, hiring, firing, training, and appraising performance of employees, setting rates of pay and hours worked, planning and controlling the budget, and monitoring legal compliance.
- Third, the employee customarily and regularly (i.e., not isolated or only occasional tasks, but less than constant or continual duties) directs the work of at least two or more other full-time employees or their equivalent. This could include, for example, one full-time employee and two part-time employees.
- Finally, the employee has the authority to hire and/or fire other employees. If the employee does not have direct authority to do so, the employee at least suggests and recommends as to the hiring, firing, advancement, promotion or any other change in status, and that employee’s suggestions and recommendations must be given particular weight.
If all requirements are satisfied, the employee is considered “exempt” from the minimum wage and overtime requirements of the FLSA.
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