Executive, Professional and Administrative Employees

Executive, administrative, professional, and outside sales employees may be exempt, meaning that they can be excluded from the federal minimum wage and overtime pay requirements. If you are “exempt,” this means that your employer is not required by law to give you pay for overtime work.

  • Exempt employees must be paid with a salary
  • Must meet certain criteria in job requirements
  • Just because a worker receives a salary that does not mean the worker cannot be due overtime.
  • Reduction in employee’s pay for time missed when sick
  • Failure of employers to pay full salary owed each week
  • Employees classified as management who do not actually perform management tasks as set out by the law
  • Employees with degrees that usually apply to the exemptions, but who are not using the degree on the job
  • Employers confusing acquired job skills with the use of independent judgment
  • Salaried employees receive a set pay each workweek without taking into account the actual number of hours worked
  • Management tasks include, but are not limited to, directing the work of other employees, hiring and firing, and independent judgment of your own work
  • Non-Management functions include, but are not limited to, ringing up sales, preparing food or waiting tables, making sales
  • “Outside sales” employees are those making sales or obtain orders. See Outside Sales
  • In order to be considered an “executive,” which by law excludes you from overtime pay provisions, you must meet certain requirements. Note, however, that the law does not necessarily require that all of the criteria are met.
    • management as your main duty
    • directing the work of two or more full-time employees
    • having the authority to hire and fire, or make recommendations regarding decisions affecting the employment status of others
    • independently judge your own work
    • receiving a salary
    • not devoting more than 20% of your time to non-management functions (40% in retail and service establishments).

    See also Managers, Supervisors, Assistant Managers and Associate Managers

  • In order to be considered an “administrator,” which excludes you from being required to receive overtime pay, you must meet certain requirements:
    • office or non-manual work
    • carrying out school administration
    • independently making decisions
    • helping executives with their responsibilities
    • performing specialized or technical work
    • special assignments
    • receiving a salary
    • not devoting more than 20% of your time to work other than that described above (40% in retail and service establishments)

    Not all of the requirements must be met all of the time.

  • In order to be considered a “professional” you must meet certain requirements.
    These may include:

    • advanced knowledge and education in your work
    • work in an artistic field which is original and creative,
    • regular judgment about your work
    • work which is intellectual and varied in character
    • job cannot be calculated in amounts of time
    • receipt of a salary (except doctors, lawyers, teachers and certain computer occupations)
    • not devoting more than 20% of their time to work other than that described above

    Not all of the requirements must be met all of the time.

While the following groups generally receive a salary rather than an hourly wage, they do not fall into the categories listed above and receive separate treatment:

  • Outside sales, charitable and volunteer work
  • Teachers
  • Computer Workers

Managers, Supervisors, Assistant Managers and Associate Managers

Many employees who are classified by their employers as “salaried managers” or “supervisors” are entitled to overtime pay. This is because their actual job duties do not exempt them from FLSA regulations.

Whether your job duties are truly classified as manager or supervisor is very fact specific. Note that many of these same rules and problems apply to “assistant managers” and “associate managers” as well.

Consider the following factors:

  • Management or supervision of other employees means that two or more full time employees report to you for work assignments and oversight of their daily tasks
  • Look behind the title to see what work is really being performed
  • If so, then you are not exempt from overtime pay because pay docking is inconsistent with your status as a “salaried” manager or supervisor
  • This is where most employers get into trouble.
  • Managers/Supervisors must spend at least 80% (in retail and service industries 60%) of their time in management duties.
  • In other words, if you spend a large part of your time performing tasks such as ringing up sales, preparing food orders or filling in for absent non-managers then you may not be a “true” manager or supervisor and could be due overtime.
  • Some employers will abuse so-called salaried assistant and associate manager employees, requiring them to perform a large amount of “fill-in” work for non-salaried employees who do not show up for work. This occurs more often when hiring is tight. This illegal practice works because the employer uses as an incentivethe possibly becoming a manager with a much greater salary and eligibility for greater bonuses. Often, the salaried assistant and associate manager employees will work a very large number of overtime hours, resulting in a very large amount due the employee. The amount due could be in the tens of thousands of dollars. Unfortunately, this unfair practice is much more common than most people think.
  • Some examples of management duties include:
    1. Setting the schedules of other employees;
    2. Making decisions about hiring or firing employees; and
    3. Directing the work of at least 2 other full-time employees.
  • If you are paid hourly, then you are not exempt from overtime pay regardless of your management duties. You should be due overtime pay for hours in a week worked over forty.

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