Administrative Exemption Law and Legal Definition

An administrative exemption is a reference to an employee who is not subject to the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA). The FLSA requires employers to pay an employee overtime (1 and 1/2 times his or her regular rate of pay) if that employee works more than 40 hours per week.

There are four specific exemptions under the FLSA: administrative, executive, professional, some computer employees, and outside sales personnel. If an employee qualifies for one of these exemptions, the employer is not required to pay overtime to that employee. Definitions of administrative duties vary, but analysis focuses on the exercise of discretion and independent judgment in job performance.