Focus on Decision Making When Deciding Exempt Status — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Focus on Decision Making When Deciding Exempt Status

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in Hiring,Human Resources,Leaders & Managers,Leadership Skills

Q. I believe that one of our employees falls within the administrative exemption under FLSA, but I'm not sure if he “regularly exercises discretion and independent judgment.” How can I make that determination? —A.C., Mississippi

A. It's a fine line. “Discretion and independent judgment” involve decision making, and they also imply that the person has the authority or power to make independent choices, without immediate direction or supervision. For example, a personnel clerk who interviews applicants just to screen them for certain job criteria would not be using independent judgment. But this same work by an employee who establishes the hiring criteria and either hires or participates in the selection would constitute exempt work.

An important point: The regulations don't require that an employee is the final decision maker to find that she exercises “independent judgment.” Instead, you should look at whether decisions are made as a result of that employee's own independent judgment. The fact that an employee's decision can be reviewed by others doesn't mean the employee is not exempt.

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