The Administrative Exemption Under FLSA

Administrative Exemption Requirements

The administrative exemption under 29 CFR § 541.200 requires ALL of the following:

1. Salary Basis

Paid on a salary basis at not less than $684 per week ($35,568 annually, as of January 2025).

2. Office or Non-Manual Work

The primary duty must be office or non-manual work directly related to the management or general business operations of the employer or the employer's customers.

This includes work in functional areas such as:

• Tax, finance, accounting, budgeting, auditing
• Insurance, quality control, purchasing, procurement
• Advertising, marketing, research
• Safety and health, personnel management, HR
• Employee benefits, labor relations, public relations

3. Discretion and Independent Judgment

The employee must exercise discretion and independent judgment with respect to matters of significance. This means:

• Authority to make independent choices, free from immediate supervision
• Comparing and evaluating possible courses of action
• Authority to commit the employer in matters with significant financial impact
• Authority to negotiate and bind the company
• Providing expert advice to management

The "Directly Related" Requirement

The work must be "directly related to the management or general business operations." This distinguishes administrative employees from production employees. An employee on a manufacturing line is in production, even if they exercise some judgment. An employee in the HR department advising on hiring policies is in administration.

Who Typically Qualifies

• HR managers who develop and implement policies
• Financial analysts advising on investments
• Marketing managers planning campaigns
• IT administrators managing systems infrastructure
• Executive assistants who exercise independent judgment on significant matters

Who Typically Does Not Qualify

• Bookkeepers who record transactions without exercising judgment
• Administrative assistants who follow established procedures
• Customer service reps who follow scripts
• Employees who apply well-established techniques without deviation