The "Executive Exemption"

To be covered under the "executive exemption", the employee must be paid a salary of at least $455.00 per week and his/her primary duty is the management of the enterprise or a subdivision of the enterprise and who regularly and customarily directs the work of two or more full-time employees, and has hire/fire authority or his/her recommendations regarding hiring/firing are given particular weight. 29 C.F.R. § 541.100 et seq.

Examples of employees who may be covered by the executive exemption include the employees who truly manage the business. Generally, "management" includes, but is not limited to, activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees' productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type 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. 29 C.F.R. § 541.102. However, any employee who owns 20% or more of the business and actively participates in its management falls under the executive exemption, no matter what work they actually perform.