Two or More Full-Time Employees – Executive Employee Exemption

Two or More Full-Time Employees – Executive Employee Exemption

For purposes of the executive employee exemption under the Fair Labor Standards Act (FLSA), two or more full-time employees is interpreted to mean either two actual full-time employees or their equivalent. For example, the threshold would be met if there was one full-time employee and two half-time employees or four half-time employees. 29 CFR 541.104(a)

Although not explicitly defined by the regulations, full-time typically means 40 hours per workweek, although there may be some limited exceptions (need to define exceptions). See Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233 (11th Cir. 2008); Johnson v. Big Lots Stores, Inc., 604 F.Supp.2d 903 (E.D. Louisiana 2009). The Department of Labor applies what is called the “80-hour rule” when investigating misclassification claims. To qualify for the executive exemption, a supervisor must manage a minimum of two employees whose total hours in a workweek add up to at least 80 hours. US DOL Wage and Hour Div. Field Operations Manual 22b02. Overtime hours are not included in the calculation. For example, if one employee works 50 hours in a workweek and another works 30, the 80-hour threshold would not be met because the 10 hours of overtime worked by the first employee would not be included in the calculation. US DOL Wage and Hour Div. Field Operations Manual 22b02(b).

Additionally, multiple supervisors may be assigned to the same group of employees so long as there are enough hours worked by all the employees for each manager to meet the minimum threshold. 29 CFR 541.104(b),(d). For example, two supervisors assigned to a group of four full-time employees could both qualify for the executive exemptions because each separately can be credited with managing at least two full-time employees. On the other hand, if there were only three full-time employees assigned to both managers, only one of the managers could qualify for the executive exemption. Hours worked by one employee cannot be credited to more than one supervisor. See US DOL Wage and Hour Opinion Letter FLSA 2007-03

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