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November 18, 2010
Key Factors in Determining the Administrative Exemption

In a BLR webinar entitled "Overtime: Legal Strategies for Whittling Down Your Payouts Without Breaking the Law," Harold (Hal) M. Brody, Esq., partner, and Fredric C. Leffler, Esq., Senior Counsel in the Labor and Employment Law Department of Proskauer Rose LLP described the key factors in determining who's really entitled to overtime.

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  • There are three major exemptions: Executive, Administrative and Professional
  • Take into account the duties test plus the Salary Basis test
  • The employee's title and being paid a salary are not determinative, yet many employers still get this wrong

An exempt Administrative employee is one who:

  • Meets the Salary Basis test
  • Performs office or nonmanual work directly related to management policies or general business operations of the employer or the employer's customers
  • Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance
  • There is much ongoing litigation over the Production vs. Administrative dichotomy:
    • Administering the business affairs of the enterprise rather than producing the goods and services the enterprise exists to produce and market
  • Examples of potentially exempt positions (Sec. 541.203) include:
    • Insurance Claims Adjusters
    • Team Leaders
    • Human Resources Managers
    • Financial Services Employees/"Registered Representatives"
    • Executive or Administration Assistants in very limited circumstances

Harold (Hal) M. Brody, Esq. is a partner in the Labor & Employment Law Department with Proskauer Rose LLP ( His practice is characterized by its diversity and he has represented employers in virtually every facet of labor and employment law. Fredric C. Leffler, Esq. is a Senior Counsel in the Labor & Employment Law Department and co-head of the Employment Law Counseling and Training Group. He represents major private and not-for-profit employers in all aspects of labor and employment law.

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