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How does FLSA administrative exemption work?

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in Management Training

Q. I think one of our employees falls within the administrative exemption under the Fair Labor Standards Act (FLSA), but I’m not sure if he “regularly exercises discretion and independent judgment.” How can I make that determination?

A. The determination is highly fact-based and depends on the specific job duties that the individual performs.

According to the FLSA regulations, “[f]actors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.” (29 C.F.R. 541.202(b))

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