Who Counts as an Exempt Administrative Employee?

Just because you’re salaried—or have “Administrator” in your title—doesn’t automatically mean you’re exempt from overtime pay. Under the Fair Labor Standards Act (FLSA), your actual job duties and your earnings both matter.

Let’s break down what the law currently says.

The Current Rules for Administrative Exemptions

Currently, we’re operating under the FLSA rules set in 2019. While the Department of Labor proposed updates in April 2024 (including raising the salary threshold), those changes were blocked by a federal court in November. So until further notice, here are the standards:

• You must earn at least $684 per week on a salary or fee basis, and
• If you’re classified as a “highly compensated employee,” you must earn at least $107,432 per year

These are the baseline requirements to even be considered for the administrative exemption. But salary alone isn’t enough; you must also pass a duties test to qualify, which we’ll cover next.

What the FLSA Requires for Administrative Exemption

To qualify as an exempt administrative employee under the Fair Labor Standards Act (FLSA), you must meet all three of the following criteria:

• You’re paid on a salary or fee basis of at least $684 per week
• Your primary duties involve non-manual work directly related to managing or operating the business (or a client’s business)
• You regularly exercise independent judgment on significant business matters

What Qualifies as “Administrative Work”

Administrative roles focus on running the business, not producing its goods or delivering frontline services. Common examples include:

• Finance, budgeting, and accounting
• Human resources and employee benefits
• Marketing, PR, or advertising strategy
• Regulatory compliance or workplace safety
• Legal support, IT, and database management
• Project management or internal operations support

You don’t need to work in-house for this to apply. If you're helping clients manage their operations, say, as a consultant or advisor, that may still qualify.

What Doesn’t Count

Roles that focus on execution or delivery, like working an assembly line, selling merchandise, or providing direct customer service, or the service your employer provides, don’t meet the test for administrative exemption, no matter your title or salary.

What “Discretion and Independent Judgment” Really Means

To qualify for the administrative exemption, your job must involve more than just completing tasks or following instructions. You should regularly:

• Weigh different options and make decisions based on analysis
• Determine how to carry out your duties without being micromanaged
• Apply or interpret company policies in real-world situations
• Work independently, not just carry out orders

You don’t need to have the final word on every decision. What matters is that you’re making informed choices based on your own judgment, even if a supervisor later reviews or approves them. However, if you lack genuine decision-making authority, you likely don’t qualify as an exempt administrative employee.

What Counts As a “Matter of Significance”

Here’s where it gets specific. To qualify, the decisions you make must have a real business impact. That means handling responsibilities like:

• Developing or interpreting policies
• Managing a department budget
• Recommending strategic initiatives
• Influencing internal processes or client outcomes

Just doing important work, or using expensive equipment, isn’t enough. The law focuses on whether your decisions shape the direction, performance, or operations of the business in a meaningful way. If not, you may be misclassified and not considered an administratively exempt employee.

What About Highly Compensated Employees?

If you earn at least $107,432 per year, and at least $684 per week is paid on a salary or fee basis, you may qualify as exempt, even if you don’t meet every part of the full administrative exemption test.

To be considered exempt under this category, you just need to regularly perform at least one duty from the executive, administrative, or professional exemption categories. So, if you’re a high earner doing office work and exercising judgment on important matters, chances are you’re exempt.

How to Check If You’re Exempt

Not sure where you fall? Here’s a quick checklist. You might be exempt under the administrative exemption if:

• You earn at least $684 per week on a salary or fee basis
• Your work is non-manual and performed in an office setting
• Your job involves supporting business operations internally or for clients’ business operations
• You make independent decisions on significant matters, rather than just following instructions

Disclaimer: This information is based on fact sheets that DOL provides.

Know Your Rights: Check Your Classification

It's your right to be paid fairly for the work you do. If you believe your employer has misclassified you, you may need a professional to review your case.

That’s where Morgan & Morgan comes in. Please contact us today to learn more.