Executive Exemptions

The Fair Labor Standards Act (“FLSA”), a federal labor law which was established to protect workers from certain unfair labor practices, prescribes express standards for wages and pay for employees in both the public and private sectors. These standards include, for example, the requirement to pay employees at least the minimum wage for all hours worked, as well as overtime pay for hours worked in excess of 40in a given workweek. Every state also has its own additional standards for wages and pay. If the FLSA and state standards are different, the rules that provide the most protection for the employees will apply.

However, not every worker is protected under the FLSA. Certain employees, such as, for example, bona fide executive, administrative and professional employees, are “exempt” from FLSA requirements and ineligible for minimum wage and overtime pay.

To be classified as “exempt,” the employee generally must meet the following three tests: (1) the salary level test (i.e., how much the employee is paid); (2) the salary basis test (i.e., how the employee is paid); and (3) the job duties’ test (i.e., what kind of work the employee does). An employee’s job title does not determine the exempt status.

Details of Executive Exemptions

To qualify for the executive exemption, the employee must be paid on a salary basis, and paid not less than $684 per week (effective January 1, 2020), exclusive of board, lodging or other facilities. The employee must also meet the job duties test. Specifically:

  1. the employee’s primary duty must be managing the enterprise; and
  2. the employee must be customarily and regularly directing the work of two or more other employees; and
  3. the employee must have the authority to hire or fire other employees or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must have particular weight.

If the employee does not meet each of the above criteria, the employee cannot be legally classified as an executive exempt worker. If the employee is classified as such despite meeting these criteria, then the employee may be misclassified. –When a worker is misclassified as an exempt employee, it is often unfair to the worker because he or she is without the legal protections typically afforded to employees, including wage and hour laws. If an employee is found to be misclassified, the employer could face severe consequences, including back pay, lost benefits, penalties, interest, and attorneys’ fees.

Misclassification Attorneys at Miller Shah LLP Advocate for Misclassified Workers

If you believe you have been misclassified, contact the misclassification attorneys at Miller Shah LLP. Our lawyers help clients determine their next steps after identifying that misclassification has occurred. If you are interested in speaking to a lawyer, contact us online or call us at 866-540-5505 for an initial consultation.

Miller Shah LLP, is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. and is an active member of the Integrated Advisory Group (www.iaginternational.org), which provides our firm with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.millershah.com.

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