Administrative Exemption

Executive Exemption // Professional Exemption

PREVIOUS SHORT TEST

Salary level: $250 per week
Duties Test:
  1. primary duty of the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers, and
  2. includes work requiring the exercise of discretion and independent judgment.

CURRENT TEST

Salary level: $455 per week
Duties test:
  1. 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
  2. primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

DEFINITIONS

Scope
this exemption does not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, or police officers, fire fighters, paramedics, emergency medical technicians, correctional and probation officers, and similar public safety employees who perform work such as preventing, controlling, or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; and similar work. Such employees will not meet any of the 541 exemptions.


Primary

the principal, main, major or most important duty the employee performs. Consider the relative importance of the exempt duties as compared with other types of duties, the amount of time spent performing the exempt duties, the employee’s relative freedom from direct supervision, and the relationship between the employee’s salary and the wages paid to other employees for the same types of non-exempt work. The amount of time spent performing non-exempt work can be a useful guide. Thus, employees who spend more than 50% of their time performing exempt work will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing requires that exempt employees spend more than 50% of their time performing exempt work. Employees who do not spend more than 50% of their time performing exempt work may, nonetheless, meet the primary duty requirement based on the character of the job as a whole.


Directly related to management or general business operations

primary duty must be the performance of work directly related to the management or general business operations of the employer or the employer’s customers. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business such as functional areas of human resources, procurement, accounting, budget, quality control, legal/regulatory compliance, data base administration, and similar activities as distinguished from the “production” operations of a business. The primary work relates to servicing the business itself - employees who can be described as staff rather than line. Employees who perform work related to the management or general business of the employer’s customers, such as advisors and consultants, may also qualify for the administrative exemption.


Discretion and independent judgment primary

duty must involve the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. Factors to consider include, but are not limited to, does the employee: 1) have authority to formulate, affect, interpret, or implement management policies or operating practices; 2) carry out major assignments in conducting the operations of the business; 3) perform work that affects business operations to a substantial degree (even if assignments are related to operations of a particular segment of the business); 4) have authority to commit the employer in matters that have significant financial impact; 5) have authority to waive or deviate from established policies and procedures without prior approval; 6) have authority to negotiate and bind the company on significant matters; 7) provide consultation and expert advice to management; 8) investigate and resolve matters of significance; and 9) represent the company in handling complaints, arbitrating disputes and resolving grievances. An employee must meet at least two or three of these factors to be viewed as having discretion and independent judgment. The employee has authority to make an independent choice, free from immediate direction or supervision. However, the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The exercise of discretion and independent judgment must be more than the use of skill in applying well established techniques, procedures, or specific standards described in manuals or other sources.

Discretion and independent judgment does not include applying well established techniques, procedures, or specific standards described in manuals; clerical or secretarial work; recording or tabulating data; performing mechanical, repetitive, recurrent, or routine work. Traditional secretarial activities such as opening the mail, answering phones, making travel arrangements, taking dictation, and preparing expense reports do not constitute exempt activities.


Matters of significance

refers to the level of importance or consequence of the work performed. The work performed by an exempt administrative employee must be significant, substantial, important, or of consequence.


Note: The State of Nebraska Classification & Pay Plan lists the general overtime designation (Exempt or Non-Exempt) for each class. However, this is only a general class guide. The actual overtime designation for a position must be individually determined by the duties and responsibility assigned to that position.