To qualify for this exemption, an employee’s primary duty must be the performance of work that is directly related to the management or general business operations of the employer. The exemption generally includes executive and administrative assistants, advisory specialists, and employees who are in charge of a functional department that may include only one person. To be classified as a bona fide administrative employee under the FLSA, all of the following requirements[1] must be met:
To meet the requirements of the exemption, the employee must perform work that is directly related to assisting with the running or servicing of the business. Work directly related to management policies or general business operations is defined under the regulations to include, but not be limited to, work in functional areas such as tax, finance, accounting, budgeting, auditing, insurance, quality control, purchasing, procurement, advertising, marketing, research, safety and health, personnel management, human resources, employee benefits, labor relations, government relations, computer network and Internet activities, legal and regulatory compliance and similar activities.[2]
The regulations set out ten factors for determining whether an employee meets the requirement that the employee exercise “discretion and independent judgment with regard to matters of significance.” These factors are:
The regulations also state that the “discretion and independent judgment” requirement still can be met even if their decisions are subject to review at a higher level, and even if the employee’s duties consist of recommending action rather than the actual taking of action, as long as the other relevant factors warrant the conclusion. However, it must be more than the use of skill in applying well-established procedures or standards described in manuals[4] or other sources, and it does not include clerical or secretarial work, recording or tabulating data, or performing other mechanical, repetitive, recurrent or routine work.[5]
[1] These requirements are set out in 29 C.F.R. § 541.200.
[2] 29 C.F.R. § 541.201.
[3] 29 C.F.R. § 541.202.
[4] In 29 C.F.R. § 541.704, it is noted that the use of manuals does not automatically exclude an employee from an exemption. The use of manuals, guidelines or other procedures that relate to highly technical, scientific, legal, financial or other similarly complex matters that can be understood or interpreted only by those with advanced or specialized knowledge or skills does not affect an employee’s exempt status.
[5] 29 C.F.R. § 541.202.