- FLSA Overtime Security Advisor
Based on your response that the employee who owns a bona fide 20 percent or more equity interest in the business in which he or she is employed is not actively engaged in the management of the business, the employee does not appear to meet the duties tests for exemption as a business owner executive employee. An employee who does not meet all of the tests for exemption is entitled to the minimum wage and overtime pay protections of the Fair Labor Standards Act (FLSA).
If you have further questions about your situation, you may want to review Fact Sheet 17B: Exemption for Executive Employees Under the FLSA or contact your local Wage and Hour Division office. You may want to return to the Main Menu to see if the employee meets the requirements for exemption under another category.