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:

• The employee’s primary duty must be managing the enterprise; and
• The employee must be customarily and regularly directing the work of two or more other employees; and
• 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.