Overtime Wage Claims
Administrative Exemption
The FLSA exempts certain salaried employees from its overtime wage requirements, including certain "administrative employees."
To qualify for the administrative employee exemption, all of the following tests must be met:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a current rate not less than $684 per week;
- The employee’s 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’s customers; and
- The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
As defined by the DOL “Primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.
Work “directly related to management or general business operations” considers work directly related to assisting with the running or servicing of the business, as opposed to manufacturing, production line, or customer service or sales tasks. Examples of excluded administrative work includes tasks relating to finance, accounting, budgeting, purchasing, advertising; marketing, human resources, computer network management, database administration and similar activities.