The FLSA Management/Executive Exemption: Just the Basics
The Fair Labor Standards Act defines how employers compensate workers for standard work hours and overtime. However, the rules do not apply to everyone, as there are exemptions for specific categories of employees.
An example of an exempt worker under the FLSA is an individual with management or executive roles. Briefly, we’ll dive into the FLSA management/executive exemption guidelines to determine the employees who fall under this category.
Who Qualifies as an Exempt Worker under the FLSA Management/Executive Exemption?
The FLSA defines specific criteria employees must meet to qualify for management exemption. According to the legislation, the exempt staff must:
- Receive compensation on a salary basis, with a minimum paycheck of $684 weekly.
- Manage the organization or a recognized subdivision within the company as a primary responsibility.
- Regularly or customarily direct or supervise the work of at least two or more other full-time employees or their equivalent.
- Possess the power to employ or fire other workers or make recommendations with particular weight regarding the appointment, termination, or promotion of other staff.
The FLSA also includes an additional criterion for business owners. Individuals with at least 20% equity interest in an organization (regardless of the business type) are considered exempt employees.
What Does Primary Responsibility Mean under the Fair Labor Standards Act?
Based on the FLSA guidelines, an employee’s primary responsibility refers to their principal or significant role at an organization. This criterion has nothing to do with the individual’s job title. Instead, it focuses on the duties and activities they are involved in at the office. According to the FLSA, this term also emphasizes the “character of the employee’s job as a whole.”
Management Duties: What Does This Entail?
To avoid confusion, the FLSA includes specific roles for managing an organization or subdivision within a company. Some of these responsibilities include:
- Interviewing, selecting, and employing staff
- Defining and altering work hours and salary rates
- Directing and supervising employees
- Handling production/sales documents for supervision and control
- Evaluating staff productivity and efficiency for promotion recommendations and other related changes in status
- Attending to employee complaints and disciplining staff
- Managing the distribution of supplies and merchandise
- Defining the products, technology/tools, and supplies to purchase, stock, sell, or use for office activities
Explaining the FLSA’s Definition of “Full-time Staff or Their Equivalent”
One of the requirements for exempt managers under the FLSA is to direct the activities of at least two or more full-time employees or their equivalent. The legislation breaks it down for business owners to avoid faulty interpretations of this criterion. According to the FLSA, one full-time employee and two half-time staff are equivalent to two full-time workers. Companies can further extend this definition to three or more employees.
When Does an Employee’s Recommendations Hold “Particular Weight”?
Exempt managers under the FLSA must also have the power to give recommendations that have particular weight concerning the employment, termination, and promotion of staff. The factors that determine if a manager’s suggestions have specific weight in an organization include:
- If it is part of the individual’s responsibilities to make such recommendations
- The regularity with which they make these proposals and how often they’re relied upon
The recommendations must also relate to employees the manager/executive regularly supervises or directs. Furthermore, it’s still possible for a manager’s counsel to have particular weight even if they don’t have the final day in a matter or a higher-level executive’s suggestion has more importance.
Have You Been Denied Overtime Pay Due to FLSA Misclassification? Contact Our Employment Law Experts Today!
The FLSA exempts managers and executives from overtime pay based on specific criteria. A worker’s job title isn’t part of the standards for these exemptions. However, some employers include managerial tags on employee titles to avoid paying for overtime. If you are experiencing a similar scenario at your workplace, our expert employment attorneys at the Law Office of Sheri Oluyemi can help you get justice.
We have an in-depth understanding of US labor laws, including the Fair Labor Standards Act and other related legislation. We’ll review your case according to these regulations and reclaim your rights from your employer. Contact us now to book a free consultation with our attorneys.
Comments are closed.