Exemption Rules for Executives
Last week on our weekly newsletter, we talked about the upcoming changes to the salary compensation for overtime rules. I briefly talked about the rules to make someone exempt and today we will go over some of those rules. There are several rules that make someone exempt. We're going to go over those in the upcoming weeks. But the exemptions to use to make someone a salaried employee is as follows:
Executive Exemption
Administrative Exemption
Professional Exemption
Computer Exemption
Outside Sales Exemption
Highly Compensated Exemption
We're not going to go over all these today. We're going to place them into separate categories. Today we will cover the Executive exception. These are rules to make someone exempt from overtime because they are an executive. The employee must be compensated on a salary basis at a rate of effective January 1, 2020, at $684 per week. Starting January 2020 someone can't be paid under $684 and be given an exemption under this rule.
They have to be paid a minimum of $684 per week. The employee's primary duty must be to manage the enterprise or manage a customarily recognized department or subdivision of the enterprise. So, that could be a director of something or VP of something or a manager of something. They must regularly direct the work of at least two or more full-time employees or equivalent. So, for example, two full-time employees or maybe four-time part-time employees and also must have the authority to hire or fire other people.
Or that person you give the exemption must be able to make suggestions and recommendations to the firing, hiring, advancement, promotion, or any other changes to an employee must be given particular weight. So he has to be able to fire/hire or their recommendations hold a lot of weight.
So these are the rules to make someone exempt under the Executive exemption rule.
Thanks for your time today and remember to be great every day.
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