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Posts from April 2011.

The Fair Labor Standards Act requires employers to pay overtime to employees who work more than forty hours in a given week.  The Act provides several exceptions or “exemptions” to the forty hour rule.  If an employee falls under one of these exemptions, they are not entitled to overtime compensation.

businessman checking inventory

One exemption that is commonly used by employers and which has become the subject of recent debate is the “executive exemption”.  An employee falls under the executive exemption and is not entitled to overtime when he or she is an employee employed in a bona fide executive capacity. 

Under the FLSA and its associated regulations, an employee qualifies under the executive exemption when the following criteria are met:

  • The employee is compensated on a salary basis at a rate not less than $455 per week
  • The employee’s primary duty is management of the enterprise, department or subdivision
  • The employee customarily and regularly directs the work of two or more employees
  • The employee has the authority to hire or fire other employees or their suggestions as to hiring, firing, advancement or promotion or any other change in status are given particular weight