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Compliance Assistance Resources

elaws - employment laws assistance for workers and small businesses

- FLSA Overtime Security Advisor

Executive Employees

You indicated that the employee owns a bona fide 20 percent or more equity interest in the business in which the employee is employed. The requirements for exemption that the employee must earn a minimum amount and that the minimum amount must be paid on a salary basis do not apply to employees who own a bona fide 20 percent or more equity interest in the business that employs them.

One requirement for exemption as a business owner executive employee is that the employee must be actively engaged in the management of the enterprise in which he or she is employed. "Management" generally includes, but is not limited to, activities such as: interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees' productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked or sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.

Is the employee actively engaged in the management, as described above, of the enterprise in which employed?