Administrative Exemption: What you need to know

Under both the federal Fair Labor Standards Act (FLSA) and other federal laws applicable to public works projects, employers must pay overtime to employees who work in excess of 40 hours per week. However, the law exempts certain kinds of jobs from overtime requirements if they meet specific criteria in the law and in U.S. Department of Labor (DOL) regulations. The FLSA exempts broad categories of “white-collar” jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities and are paid a certain minimum salary. These categories of employees are commonly known as “exempt” employees and include executive, administrative, and professional employees. The FLSA also provides exemptions for outside sales personnel, certain specialized computer personnel, certain highly compensated employees (HCEs), certain retail sales employees, and employees covered by the Motor Carrier Act (MCA).

An employer should periodically review the duties of exempt employees to ensure that they still qualify for exempt status, especially if the company has undergone restructuring or downsizing.

Must meet salary basis, salary level, and duties tests for exemption. Under both the federal FLSA and other federal laws applicable to public works projects, employers must pay overtime to employees who work in excess of 40 hours per week. However, FLSA regulations exempt certain kinds of jobs from the overtime pay laws if the employees are paid on a “salary basis” and receive at least a prescribed minimum salary; and they meet special duty criteria established by the U.S. Department of Labor (DOL). ...