In a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make," Roy P. Salins, Esq., explained the criteria that must be met for an employee to qualify for the executive exemption:

• The employee must be paid a salary of not less than $455 per week ($23,660 annually).
• The salary may not be reduced because of quantity or quality of work or partial-day deductions.
• The individual's primary duty must be managing the company, or managing a customarily recognized department/subdivision (generally should be more than 50 percent of time, but may be less). Managing includes directing others, planning, determining work techniques, interviewing, hiring, training, setting pay, scheduling, evaluating employees for promotions and raises, handling complaints, budgeting, attending managerial meetings, and running meetings for subordinates.
• The employee must customarily and regularly (normally every workweek) direct the work of two or more full-time employees or their equivalents. That may include one full-time employee and two half-time employees.
• The employee must have authority to hire or fire or make recommendations that carry "particular weight": rehiring, firing, promoting or other change in employee's status. This must be part of the employee's regular job duties and relied upon by upper management. Occasional suggestions are insufficient.

A subset of the executive exemption is the business owner exemption: An employee who owns at least a bona fide 20 percent equity interest in the company in which he or she is employed, regardless of the type of business organization (e.g., corporation or partnership), and who is actively engaged in its management, is exempt.

Roy P. Salins, Esq., is a senior associate Labor and Employment Practice Area of Vedder Price PC. Based out of the firm's New York office, Salins's practice includes all aspects of litigation in federal and state courts, administrative agencies, and in arbitrations before FINRA and the AAA. Salins also devotes a large part of his practice to counseling clients in all areas of labor and employment law, compliance with federal and state nondiscrimination and wage statutes, and issues relating to reduction in force, employee compensation, benefits, staffing, hiring, discipline and discharge. He can be contacted at rsalins@vedderprice.com.