• Administrative employees qualify for exemption under FLSA if their job duties and salary meet the criteria.

To qualify for the administrative employee exemption, all of the following tests must be met. The employee must:

• Be compensated on a salary or fee basis at a rate not less than $684 per week,
• Have the primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and
• Have primary duties that include using discretion and independent judgment with respect to matters of significance.

Challenges

Common challenges and issues related to this exemption include:

• Is the person really salaried? Inappropriate deductions or fluctuations tied to hours worked may result in the loss of salaried status and the exemption.
• Is the person’s primary duty work that is office or non-manual? This is a white-collar exemption. It does not apply to those who produce the product.
• Does the person have primary duties that include discretion and judgment? Highly specialized skills are not the same as judgment. Note that the judgment must relate to matters of significance.