Understanding executive and administrative exemptions from FLSA

The federal Fair Labor Standards Act provides many protections for workers in San Diego. Understanding these protections can be an important way of ensuring fair and lawful treatment by employers. One of the most significant protections in the statute are the minimum pay and mandatory overtime protections. These laws require employers to compensate employees for overtime worked in excess of 40 hours per week at the rate of 1.5 times the worker’s regular pay.

Employers frequently attempt to avoid this requirement by classifying employees as either executive employees or administrative employees because both classes of employees are exempt from the mandatory overtime requirements of the FLSA. The mere attachment of a label does not, however, provide an automatic exemption.

To qualify for the executive employee exemption, the worker must receive a salary of not less than $455 per week and perform the following duties:

  • The worker’s primary duties must involve the management of the enterprise or management of a customarily recognized subdivision of the business
  • The employee must customarily and regularly oversee and direct the work of at least two or more full-time employees
  • The employee must have the authority to hire and fire employees.

The administrative employee exemption requires that the employee earn a salary of at least $455 per week and must perform non-manual work directly related to the management or business operations of the employer or its customers. The duties of an administrative employee must also entail the exercise of discretion and independent judgment concerning matters of significance.

An employer cannot merely avoid the mandatory overtime laws by calling an employee a manager or executive. To obtain the exemption, the substance of the employee’s work will determine whether the employee is entitled to receive paid overtime.

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