Three-part test to determining administrative exemption

According to the U.S. Department of Labor's Wage and Hour Division, employers were required to pay more than 7,700 back wages totaling $5.3 million as the results of Fair Labor Standards Act (FLSA) violations.

It's imperative that employers make sure they are correctly classifying employees as exempt or non-exempt workers and provide them with the benefits they deserve, such as minimum wage and overtime pay. However, when workers fall under certain positions, they may not be eligible for those payroll benefits.

To make sure they are properly compensating administrative workers for their employee attendance, employers can check against FLSA measures. Employees fall under the administrative exemption only if they meet the following criteria:

1. The employee must earn be salaried or earn at least $455 per week if paid per hour.

2. The employee's primary duties cannot be manual labor. The primary functions of their job must primarily deal with the general business operations or management.

3. Exercising discretion must be a primary part of the employee's duties. For example, the worker should have the authority to autonomously make hiring, firing and employee advancement decisions.