Executive Exemption

Certain executive employees are exempt from the minimum wage and overtime protections guaranteed to most other workers by the federal Fair Labor Standards Act (FLSA).

The executive employee exemption applies to executives who meet certain qualifications, or tests, concerning their job duties and compensation. There are three tests under the FLSA for exempt status, and an employee must meet the requirements of each test to qualify as exempt.

The three tests are:

1. 1. The salary level test
      An exempt executive must earn at least $23,660 per year, or $455 per week.
   2. The salary basis test
      An exempt executive’s base salary may not change depending on hours worked or quality of work.
   3. The job duties test
      An exempt executive’s primary role must involve management of direction of business and other employees. 

Executives may work across a variety of disciplines in diverse management roles involving personnel, payroll, workflow, production, materials and supplies, financing, human resources, and more.

Improperly classifying executive employees as exempt is a violation of both federal and state labor law. Executives who have been improperly classified may be entitled to back wages, overtime pay, and other damages dating back several years of employment.