Chapter § 2-13 29 CFR § 541.200. General Rule for Administrative Employees

• Jurisdiction: United States

2-13 29 CFR § 541.200. General Rule for Administrative Employees

(a) The term "employee employed in a bona fide administrative capacity" in section 13(a)(1) of the Act shall mean any employee:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities;

(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and

(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

(b) The term "salary basis" is defined at § 541.602; "fee basis" is defined at § 541.605; "board, lodging or other facilities" is defined at § 541.606; and "primary duty" is defined at § 541.700.

2-13:1 Commentary

2-13:1.1 Administrative Exemption a "Catchall" Exemption

The administrative exemption is the most misunderstood regulation, and employers often treat it as a "catchall" exemption, and lump into it employees who do not fit neatly within another exemption. For an employee to fit within the administrative exemption, the employer must establish compensation on a salary or fee basis of a certain amount per week ($455). That's the simple part. 29 CFR §§ 200(a)(2) and 200(a)(3) are more difficult to meet. Yet, employers should keep in mind that they can craft a job to fit within the exemption based on case law and regulations. A finding of exempt status is, ultimately, a question of law for the court.

• Lott v. Howard Wilson Chrysler-Plymouth, Inc., 203 F.3d 326, 330-31 (5th Cir. 2000) (the ultimate decision whether the employee is exempt under the FLSA's overtime provisions under the administrative exemption is a question of law).

A major decision from the Fifth Circuit was issued in 2017 regarding the administrative exemption. It holds that employees who perform "quality control" duties are generally not exempt.

• Dewan v. M-I, L.L.C., 858 F.3d 331 (5th Cir. 2017) (merely providing advice to a customer or client does not make for exemption coverage; rather, the employee must make policy decisions on how a business should be run and about the nature and quality of the advice).
• Hobbs v. Evo Inc., 394 F. Supp. 3d 717 ( S.D. Tex. 2019) (trial court conducts bench trial; plaintiffs were field engineers; court engaged in exhaustive

...