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elaws - employment laws assistance for workers and small businesses - FLSA Overtime Security Advisor

Executive Employees

Before beginning the analysis of whether the employee meets the duties tests for exemption as an executive, please review the following important definitions:

  • Primary duty means the principal, main, major or most important duty that the employee performs. The determination of an employee's primary duty must be based on all of the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. While time is not the sole test, as a guideline, an employee who spends more than 50 percent of his or her time performing a specific activity can generally be said to have that specific activity as his or her primary duty. If the employee spends less than 50 percent of his or her time performing his or her major or most important duty, the employee may still meet the primary duty requirement if other factors support that conclusion. Please review the definition of primary duty for further information regarding this requirement.

  • Management generally includes activities such as: supervising other employees of the employer; interviewing, selecting and training employees; setting and adjusting their pay rates and work hours; directing their work; conducting employee performance appraisals; handling employee complaints and grievances; and disciplining employees. It also includes other functions, such as planning the work; determining the merchandise to be bought, stocked and sold; planning and controlling the budget; and monitoring or implementing legal compliance measures.

  • Recognized department or subdivision refers to a unit of the business enterprise that has a permanent status and a continuing function as opposed to a mere collection of employees assigned from time to time to a specific job or series of jobs without permanent status as a recognized unit with a continuing function in the employer's organization. Please review the definition of enterprise or recognized subdivision for further information regarding this requirement.

Does the employee's primary duty involve management, as described above, of the entire business enterprise where he or she works or of a customarily recognized department or subdivision of the business?

Yes
No