Administrative Exemption

When a business hires an individual, that person is going to be paid on an hourly basis, meaning that they need to be paid for the amount of time that they work for the business and are eligible for overtime after 40 hours a week.

If they are going to be salaried, they need to meet one of these specific deductions and then you can pay them the same amount regardless of quantity and quality of work that they perform one of the exemptions is an administrative exemption, and this is often misunderstood as to how it gets applied.

Administrative exemption requires specific independence. They need to be working in the business. Individuals that will often meet the criteria for salary under administrative exemption might be IT people working on the computers for the company, HR personnel or bookkeepers. These are individuals that are working in the business and are not going to be client facing for the most part.  Often in the service sector, which is primarily what we see in our area of practice, businesses see their employees as performing administrative work. However, that’s not necessarily the work that the FLSA is considering administrative for salary basis purposes.

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