Department or Subdivision – Executive Employee Exemption


Department or Subdivision – Executive Employee Exemption

To qualify for the executive employee exemption under the Fair Labor Standards Act (FLSA), an employee must be primarily engaged in managing the employer’s company or enterprise, or managing a “customarily recognized department or subdivision of the company or enterprise.” To qualify as a “customarily recognized department or subdivision,” a department or subdivision must be permanent in nature and have continuing functions. It does not qualify if it is simply a collection of employees assigned to a specific job or series of jobs from time to time. 29 CFR 541.103(a)



The department or subdivision does not need to operate within the employer’s establishment and may move from one location to another without losing its qualifying status, so long as other factors demonstrate the continuing function of the department or subdivision. 29 CFR 541.103(c)

Additionally, a department or subdivision does not lose its qualifying status simply because the assigned employees are not consistently the same, so long as other factors demonstrate the continuing function of the department or subdivision. This includes, but is not limited to, situations where the department or subdivision pulls from a pool of employees available to other departments or subdivisions or where it pulls employees from other qualifying departments or subdivisions. 29 CFR 541.103(d)


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