{"id":7609,"date":"2022-01-19T13:18:05","date_gmt":"2022-01-19T18:18:05","guid":{"rendered":"https:\/\/env-8605394.mightybox.site\/?post_type=news&#038;p=7609"},"modified":"2024-09-24T13:33:50","modified_gmt":"2024-09-24T17:33:50","slug":"flsa-overtime-exemption-for-administrative-employees-2","status":"publish","type":"post","link":"https:\/\/techservealliance.org\/flsa-overtime-exemption-for-administrative-employees-2\/","title":{"rendered":"FLSA Overtime Exemption for Administrative Employees"},"content":{"rendered":"\n<p>This fact sheet provides information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations,&nbsp;<a href=\"https:\/\/www.ecfr.gov\/cgi-bin\/text-idx?SID=62e63b2a9c9a27781cf6af25feb88d8b&amp;mc=true&amp;node=pt29.3.541&amp;rgn=div5\" rel=\"nofollow noopener\" target=\"_blank\">29 C.F.R. Part 541<\/a>, as applied to administrative employees.<\/p>\n\n\n\n<p>The&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/flsa\" rel=\"nofollow noopener\" target=\"_blank\">FLSA<\/a>&nbsp;requires that most employees in the United States be paid at least the&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/minimum-wage\" rel=\"nofollow noopener\" target=\"_blank\">federal minimum wage<\/a>&nbsp;for all hours worked and&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/overtimepay\" rel=\"nofollow noopener\" target=\"_blank\">overtime pay<\/a>&nbsp;at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.<\/p>\n\n\n\n<p>However, Section 13(a)(1) of the FLSA provides an exemption from both&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/minimum-wage\" rel=\"nofollow noopener\" target=\"_blank\">minimum wage<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/overtimepay\" rel=\"nofollow noopener\" target=\"_blank\">overtime pay<\/a>&nbsp;for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17c-overtime-administrative#footnoteOvertime\" rel=\"nofollow noopener\" target=\"_blank\">*<\/a>&nbsp;per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee\u2019s specific job duties and salary must meet all the requirements of the Department\u2019s regulations.<\/p>\n\n\n\n<p>See other fact sheets in this series for more information on the exemptions for&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17b-overtime-executive\" rel=\"nofollow noopener\" target=\"_blank\">executive<\/a>,&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17d-overtime-professional\" rel=\"nofollow noopener\" target=\"_blank\">professional<\/a>,&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17e-overtime-computer\" rel=\"nofollow noopener\" target=\"_blank\">computer<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17f-overtime-outside-sales\" rel=\"nofollow noopener\" target=\"_blank\">outside sales<\/a>&nbsp;employees, and for more information on the&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17g-overtime-salary\" rel=\"nofollow noopener\" target=\"_blank\">salary basis<\/a>&nbsp;requirement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">ADMINISTRATIVE EXEMPTION<\/h3>\n\n\n\n<p>To qualify for the administrative employee exemption, all of the following tests must be met:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17c-overtime-administrative#footnoteOvertime\" rel=\"nofollow noopener\" target=\"_blank\">*<\/a>&nbsp;per week;<\/li>\n\n\n\n<li>The employee\u2019s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer\u2019s customers; and<\/li>\n\n\n\n<li>The employee\u2019s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">PRIMARY DUTY<\/h3>\n\n\n\n<p>\u201cPrimary duty\u201d means the principal, main, major or most important duty that the employee performs. Determination of an employee\u2019s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee\u2019s job as a whole.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">DIRECTLY RELATED TO MANAGEMENT OR GENERAL BUSINESS OPERATIONS<\/h3>\n\n\n\n<p>To meet the \u201cdirectly related to management or general business operations\u201d requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example from working on a manufacturing production line or selling a product in a retail or service establishment. Work \u201cdirectly related to management or general business operations\u201d includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network, Internet and database administration; legal and regulatory compliance; and similar activities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">EMPLOYER\u2019S CUSTOMERS<\/h3>\n\n\n\n<p>An employee may qualify for the administrative exemption if the employee\u2019s primary duty is the performance of work directly related to the management or general business operations of the employer\u2019s customers. Thus, employees acting as advisors or consultants to their employer\u2019s clients or customers \u2014 as tax experts or financial consultants, for example \u2014 may be exempt.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">DISCRETION AND INDEPENDENT JUDGMENT<\/h3>\n\n\n\n<p>In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term must be applied in the light of all the facts involved in the employee\u2019s particular employment situation, and implies that the employee has authority to make an independent choice, free from immediate direction or supervision.<\/p>\n\n\n\n<p>Factors to consider include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval, and other factors set forth in the regulation. The fact that an employee\u2019s decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">MATTERS OF SIGNIFICANCE<\/h3>\n\n\n\n<p>The term \u201cmatters of significance\u201d refers to the level of importance or consequence of the work performed. An employee does not exercise discretion and independent judgment with respect to matters of significance merely because the employer will experience financial losses if the employee fails to perform the job properly. Similarly, an employee who operates very expensive equipment does not exercise discretion and independent judgment with respect to matters of significance merely because improper performance of the employee\u2019s duties may cause serious financial loss to the employer.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">EDUCATIONAL ESTABLISHMENTS AND ADMINISTRATIVE FUNCTIONS<\/h3>\n\n\n\n<p>The administrative exemption is also available to employees compensated on a salary or fee basis at a rate not less than $684<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17c-overtime-administrative#footnoteOvertime\" rel=\"nofollow noopener\" target=\"_blank\">*<\/a>&nbsp;a week, or on a salary basis which is at least equal to the entrance salary for teachers in the same educational establishment, and whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment. Academic administrative functions include operations directly in the field of education, and do not include jobs relating to areas outside the educational field. Employees engaged in academic administrative functions include: the superintendent or other head of an elementary or secondary school system, and any assistants responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the learning potential and achievement of students, establishing and maintaining academic and grading standards, and other aspects of the teaching program; the principal and any vice-principals responsible for the operation of an elementary or secondary school; department heads in institutions of higher education responsible for the various subject matter departments; academic counselors and other employees with similar responsibilities. Having a primary duty of performing administrative functions directly related to academic instruction or training in an educational establishment includes, by its very nature, exercising discretion and independent judgment with respect to matters of significance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">HIGHLY COMPENSATED EMPLOYEES<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17h-overtime-highly-compensated\" rel=\"nofollow noopener\" target=\"_blank\">Highly compensated employees<\/a>&nbsp;performing office or non-manual work and paid total annual compensation of $107,432 or more (which must include at least $684* per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">WHERE TO OBTAIN ADDITIONAL INFORMATION<\/h3>\n\n\n\n<p>For additional information, visit our Wage and Hour Division Website:&nbsp;<a href=\"http:\/\/www.wagehour.dol.gov\/\" rel=\"nofollow noopener\" target=\"_blank\">http:\/\/www.wagehour.dol.gov<\/a>&nbsp;and\/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).<\/p>\n\n\n\n<p>When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees. Links to your state labor department can be found at&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/contact\/local-offices\" rel=\"nofollow noopener\" target=\"_blank\">www.dol.gov\/agencies\/whd\/contact\/local-offices<\/a>.<\/p>\n\n\n\n<p>This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.<\/p>\n\n\n\n<p>The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.<\/p>\n\n\n\n<p><em>Source: U.S. Department of Labor &#8211;&nbsp;<a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fact-sheets\/17c-overtime-administrative\" rel=\"nofollow noopener\" target=\"_blank\">Fact Sheet #17C<\/a>: Exemption for Administrative Employees Under the Fair Labor Standards Act (FLSA)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This fact sheet provides information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations,&nbsp;29 C.F.R. Part 541, as applied [&hellip;]<\/p>\n","protected":false},"author":3386,"featured_media":5023,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_company_domain":"","_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[1],"tags":[],"topics":[44,246],"member-content":[],"class_list":["post-7609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","topics-legal-legislative","topics-human-resources"],"acf":[],"_links":{"self":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/7609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/users\/3386"}],"replies":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/comments?post=7609"}],"version-history":[{"count":2,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/7609\/revisions"}],"predecessor-version":[{"id":20936,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/7609\/revisions\/20936"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media\/5023"}],"wp:attachment":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media?parent=7609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/categories?post=7609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/tags?post=7609"},{"taxonomy":"topics","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/topics?post=7609"},{"taxonomy":"member-content","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/member-content?post=7609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}