Executive Exemption2018-09-12T14:45:54+00:00

In order to avoid payment of overtime or minimum wages under the executive exemption, the employer must prove that the employee is paid a salary of at least $455 per week, and has all of the following primary job duties:

  • Management of the company in which the employee is employed or of a customarily recognized department or subdivision of that company;
  • Customarily and regularly directs the work of two or more other employees; and
  • Has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.

Example 1: Not Paid on a Salary Basis

An employee paid on an hourly basis who manages the human resources department of a company, customarily and regularly directs the work of three employees, has the authority to hire and fire those employees is a non-exempt employee. While all of the job duties for the executive exemption exist, the employee must be paid overtime wages and minimum wages because that employee is not paid on a salary basis of at least $455 per week.

Example 2: Does Not Manage Two Or More Employees

An employee paid a salary of $800 per week who manages the payroll department of a company, customarily and regularly directs the work of one other employee, and has the authority to hire and fire that employees is a non-exempt employee. The executive exemption requires that two or more employees be managed in order for that exemption to apply.

Example 3: Does Not Hire and Fire, or Make Recommendations on Hiring and Firing

An employee paid a salary of $500 per week who manages the reception department of a company, customarily and regularly directs the work of six other employees, but does not hire and fire those employees or make recommendations relied upon by a supervisor as to the hiring, and firing of those employees is a non-exempt employee. The executive exemption requires that the employee have the authority to hire and fire the employees he/she manages or make recommendations on hiring, firing, promotion, or other change in employment status that is relied on by a superior in making the ultimate decision.