The Executive Exemption Under FLSA

Executive Exemption Requirements

The executive exemption under 29 CFR § 541.100 requires ALL of the following:

1. Salary Basis

The employee must be paid on a salary basis at not less than $684 per week ($35,568 annually, as of January 2025).

2. Primary Duty Is Management

The employee's primary duty must be managing the enterprise or a customarily recognized department or subdivision. "Management" includes activities like:

• Interviewing, selecting, and training employees
• Setting and adjusting rates of pay and hours of work
• Directing the work of employees
• Maintaining production or sales records
• Appraising employee productivity and efficiency
• Handling employee complaints and grievances
• Disciplining employees
• Planning and apportioning work
• Determining techniques, materials, and equipment to be used

3. Directs Two or More Employees

The employee must customarily and regularly direct the work of two or more full-time employees (or their equivalent, e.g., four half-time employees).

4. Hiring/Firing Authority

The employee must have the authority to hire or fire other employees, OR their recommendations on hiring, firing, advancement, or other status changes must be given "particular weight."

Common Questions

What does "primary duty" mean?

Primary duty is the principal, main, major, or most important duty. The 50% time test is a useful guide but not the only factor. An employee who spends 40% of their time managing but whose management duties are the most important aspect of their job may still qualify.

What if someone manages AND does regular work?

Many managers also perform non-exempt duties (a "working supervisor"). The key question is whether management is the primary duty, considering the relative importance of the work, not just time spent.

Does "department" mean a formal org chart?

Not necessarily. A "customarily recognized department" is a unit with permanent status and a continuing function, not just a collection of employees assigned to a specific job.