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Administrative Employee
Practical Law Glossary Item 5-507-9929 (Approx. 4 pages)
Glossary
Administrative Employee
An employee classification under the Fair Labor Standards Act (FLSA) (and some state and local equivalents) that is exempt from minimum wage and overtime pay requirements (29 C.F.R. §§ 541.200 to 541.204).
To qualify for the administrative exemption under the FLSA, each employee must satisfy the following:
- The employee must be compensated:
- on a salary or fee basis; and
- at a rate at least equal to the standard salary level of $844 a week, effective July 1, 2024 ($1,128 a week, effective January 1, 2025, with subsequent updates at three-year intervals starting July 1, 2027) ($684 a week before July 1, 2024) (special salary levels apply to US territories) (29 C.F.R. §§ 541.600 and 541.607).
- The employee's primary duty must:
- be 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
- include the exercise of discretion and independent judgment on significant matters.
(29 C.F.R. §§ 541.200 to 541.203.)
An employee may also qualify for the administrative exemption if they satisfy the following:
- The employee is compensated:
- on a salary or fee basis at a rate at least equal to the standard salary level; or
- on a salary basis at a rate at least equal to the entrance salary for teachers in the educational establishment by which they are employed.
- The employee's primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment or department or subdivision of that establishment.
On April 23, 2024, the DOL announced a final rule to increase the standard salary level for the executive, administrative, and professional (EAP) exemptions and the total annual compensation threshold for the highly compensated employee (HCE) exemption (89 Fed. Reg. 32842). The first of two incremental increases took effect July 1, 2024. The second is scheduled to take effect January 1, 2025, with subsequent updates at three-year intervals starting July 1, 2027. (29 C.F.R. §§ 541.600 and 541.607.) For more on the DOL's 2024 final rule, including prior rulemaking and pending legal challenges, see Minimum Salary for the Executive, Administrative, and Professional Exemptions Under the FLSA: DOL Rulemaking Tracker.
For more information on the exemption requirements for administrative employees under the FLSA, see FLSA White Collar Exemptions Checklist: Administrative Exemption.
State or local law may provide for the same or a similar exemption or may prohibit the exemption of administrative employees. For more information on state wage and hour laws, see Wage and Hour Claims Toolkit: State-Specific Materials and Wage and Hour Laws: State Q&A Tool.