Employment and Labor Laws

Fair Labor Standards Act

Exemptions

Executive Employees

The Fair Labor Standards Act (FLSA) exempts from its minimum wage and overtime standards employees who qualify as executive employees. 29 USC 213(a)(1); 29 CFR 541.100-106 For an employee to qualify for the executive employee exemption, the following criteria must be met:

29 CFR 541.100

An employee also qualifies for the executive exemption if he or she owns at least a 20 percent equity interest in the company or enterprise by which he or she is employed and is actively engaged in the company or enterprise’s management. The minimum salary requirements do not need to be met for this “business owner” exemption to apply. 29 CFR 541.101

Employees training for executive positions, but who are not actually performing exempt work, are not eligible for exempt status. 29 CFR 541.705.


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