The administrative exemption is designed for relatively high-level employees whose main job is to "keep the business running. Employees who make what the business sells are not administrative employees. Administrative employees provide "support" to the operational or production employees. They are "staff" rather than "line" employees. Examples of administrative functions include labor relations and personnel human resources employees , payroll and finance including budgeting and benefits management , records maintenance, accounting and tax, marketing and advertising as differentiated from direct sales , quality control, public relations including shareholder or investment relations, and government relations , legal and regulatory compliance, and some computer-related jobs such as network, internet and database administration.
See Computer employees. To be exempt under the administrative exemption, the "staff" or "support" work must be office or nonmanual, and must be for matters of significance. Clerical employees perform office or nonmanual support work but are not administratively exempt.
Nor is administrative work exempt just because it is financially important, in the sense that the employer would experience financial losses if the employee fails to perform competently. Administratively exempt work typically involves the exercise of discretion and judgment, with the authority to make independent decisions on matters which affect the business as a whole or a significant part of it. Questions to ask might include whether the employee has the authority to formulate or interpret company policies; how major the employee's assignments are in relation to the overall business operations of the enterprise buying paper clips versus buying a fleet of delivery vehicles, for example ; whether the employee has the authority to commit the employer in matters which have significant financial impact; whether the employee has the authority to deviate from company policy without prior approval.
An example of administratively exempt work could be the buyer for a department store. The job involves work which is necessary to the overall operation of the store -- selecting merchandize to be ordered as inventory. It is important work, since having the right inventory and the right amount of inventory is crucial to the overall well-being of the store's business. It involves the exercise of a good deal of important judgment and discretion, since it is up to the buyer to select items which will sell in sufficient quantity and at sufficient margins to be profitable.
Other examples of administratively exempt employees might be planners and true administrative assistants as differentiated from secretaries with fancy titles.
Bookkeepers, "gal Fridays," and most employees who operate machines are not administratively exempt. Merely clerical work may be administrative, but it is not exempt. Most secretaries, for example, may accurately be said to be performing administrative work, but their jobs are not usually exempt. Similarly, filing, filling out forms and preparing routine reports, answering telephones, making travel arrangements, working on customer "help desks," and similar jobs are not likely to be high-level enough to be administratively exempt.
Many clerical workers do in fact exercise some discretion and judgment in their jobs. However, to "count" the exercise of judgment and discretion must be about matters of considerable importance to the operation of the enterprise as a whole. Routinely ordering supplies and even selecting which vendor to buy supplies from is not likely to be considered high- enough to qualify the employee for administratively exempt status.
There is no "bright line. Rights of exempt employees. An exempt employee has virtually "no rights at all" under the FLSA overtime rules. Nothing in the FLSA prohibits an employer from requiring exempt employees to "punch a clock," or work a particular schedule, or "make up" time lost due to absences. Nor does the FLSA limit the amount of work time anemployer may require or expect from any employee, on any schedule.
Keep in mind that this discussion is limited to rights underthe FLSA. Exempt employees may have rights under other laws or by way of employment policies or contracts. Rights of nonexempt employees. FLSA Coverage. Email This Page to a Friend. Printer Friendly Version. Send Technical Questions to webmaster flsa. Exempt or Nonexempt. Salaried : An individual who receives the same salary from week to week regardless of how many hours he or she works. Exempt employees must be paid on a salary basis, as discussed above.
Nonexempt employees may be paid on a salary basis for a fixed number of hours or under the fluctuating workweek method. Salaried nonexempt employees must still receive overtime in accordance with federal and state laws. Hourly : An individual who receives an hourly wage for work performed. Generally, such individuals, because of the method of payment, are classified as nonexempt and are subject to the overtime provisions of the FLSA.
Exempt computer professionals may also be paid on an hourly basis, as could those exempt under the professional exemption, such as teachers, lawyers, doctors, and still retain their exempt status. People Manager Overtime Eligibility and Exemptions. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark. Delete Cancel.
You have successfully removed bookmark. Delete canceled. The pros of being an exempt employee start with the security of knowing that you have a steady paycheck. Also, exempt employees tend to earn more than hourly ones and have access to such extras as retirement benefits, including individual retirement accounts IRAs , k plans, and pensions; bonuses; employer-sponsored healthcare plans; and paid vacation time and sick days. The downside comes largely in not being eligible for overtime.
Depending on the mindset of your employer, you could find yourself working long hours to fulfill an overloaded work portfolio without any recourse for additional reimbursement or reducing the stress brought on by the long hours.
In short, you are at the mercy of your boss. Requirements differ from state to state, but the FLSA Fair Labor Standards Act classifies exempt employees as anyone doing jobs that fall into these categories: professional, administrative, executive, outside sales, STEM Science, Technology, Engineering, and Math -related, and computer-related. The advantages of being an exempt employee start with the security of knowing that you have a steady paycheck. The main disadvantages lie in not being eligible for overtime or qualifying for minimum wage.
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Unions and Right to Work. Table of Contents Expand. What Is an Exempt Employee? Understanding Exempt Employees.
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