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Administrative Exemption
National Summary
The Fair Labor Standards Act (FLSA) requires employers to pay employees overtime (11/2 times their regular rate of pay) if they work over 40 hours (29 CFR 541et seq.). The FLSA also contains exemptions. Employers may not have to pay overtime to administrative, executive, professional, computer, outside sales personnel, and certain highly compensated employees (HCEs). What is an exempt employee? In order to qualify as exempt from the overtime pay requirements, an employee must pass three tests: the salary level test, salary basis test, and duties tests.
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