Q. We are a small start-up company. We have an office manager whom we pay $350 per week. I understand that, in order to be exempt from , we would need to pay her at least $455 per week. We can’t afford to pay that amount, but are willing to provide her stock in the company. Will that help?
A. Yes, if she has at least a 20% equity interest in the company, she is exempt under the executive exemption to the Fair Labor Standards Act ( ). This is an exception to the salary requirement under the FLSA.
To be , she would still need to be actively engaged in of the company. The term “management” generally includes activities such as selecting and training employees; setting and adjusting their pay and hours; maintaining production or sales records; appraising employees; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the types of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
As long as the office manager engages in these types of management duties and her ownership interest in the company is genuine, she should be exempt under the FLSA.
- 10 Secrets to an Effective Performance Review
- How to Write Meeting Minutes
- Hire education: Filling job positions without inviting lawsuits
- Minimum wage rising to $7.25; Obama calls for $9.50 by 2011
- If no job loss, no damages for whistle-blower
- Employees can't sue under state's ERA if other laws cover employer