The document provides guidance on determining if employees meet the executive exemption from overtime pay under the Fair Labor Standards Act. To qualify for the exemption, an employee must (1) earn a salary of at least $455 per week, (2) have management of a department or subdivision as their primary duty, (3) regularly supervise two or more employees, and (4) have authority to hire/fire or their recommendations are given significant weight. The document outlines tests for each of these criteria and provides an example job description of a COO that would likely meet the exemption.

1. Fair Labor Standards Act (FLSA) Overtime Regulations
CHECKLIST - SALARY AND DUTIES TESTS FOR EXECUTIVE EXEMPTION FROM
OVERTIME
Effective August 23, 2004
If the following four questions (A, B, C & D) are all answered “yes,” then the employee meets the
executive exemption test.
A. Does the employee receive a salary of at least $455 per week? Yes __ No __
1. Salary means employee regularly receives a predetermined amount each pay period for
work he performs any week.
2. Salary must be exclusive of board, lodging or other facilities.
3. Salary may not be subject to reductions based on variations in the quality or quantity of
work (i.e., “snow” days).
4. Employee may be subject to disciplinary deductions, in full-day increments, pursuant to a
written policy uniformly applied to infraction of workplace safety rules.
5. Absences of a work day or longer may result in full-day increment salary reductions if the
absence is caused by personal illness or other personal reasons.
6. Deductions are unavailable for absences caused by jury duty, witness duty, or temporary
military leave.
7. Salary deductions are available for absences governed by the FMLA.
8. Special treatment is available to employees who receive total annual compensation of at
least $100,000, composed of salary, incentive, and other nondiscretionary payments.
B. Is the employee’s primary duty the management of a customarily recognized department or
subdivision of the company? Yes __ No __
1. Management duties include interviewing, selecting, and training of employees; setting
and adjusting their rates of pay and hours of work; directing their work; maintaining their
production or sales records for use in supervision or control; appraising their productivity
and efficiency for the purpose of recommending promotions or other changes in their
status; handling their complaints and grievances and disciplining them when necessary;
planning the work; determining the techniques to be used; proportioning the work among
the employees; determining the types of materials, supplies, machinery or tools to be
used, or merchandise to be bought, stocked and sold; controlling the flow and distribution
of materials or merchandise and supplies; providing for the safety of employees and
property.
2. Primary duty generally means the principal or most important duty the employee
performs.
3. When an employees spends less than the majority of his/her time performing
management functions, he/she may still be considered an executive depending upon
other factors such as:
a. the relative importance of the managerial duties as opposed to the other types of
duties;
b. the frequency with which the employee exercises discretionary powers;
c. the employee’s relative freedom from supervision; and
d. the relationship between the employee’s salary and the wages paid to other
employees who perform the same kind of non-exempt work performed by the
supervisor.
4. Employee must direct a unit of employees with a permanent status-continuing function,
not merely a collection of employees assigned to complete a project.

2. 5. Consider what percentage of time employee spends performing similar duties to those
completed by his subordinates. If significant administrative or professional duties are
performed, consider the “combination” exemption.
6. If fewer than six subordinates are supervised, examine primary duty very closely (i.e.,
employee turnover, contacts with internal and external customers, maturity of functional
area).
C. Do the employee’s duties include the regular supervision of two or more full-time employees or the
equivalent (at least 80 hours of subordinate time each week)? Yes __ No __
1.Joint or shared supervision with another exempt classified employee is insufficient.
2.Supervision only in the regular manager’s absence is insufficient.
D. To qualify as an exempt executive, an employee must have the authority to hire or fire other
employees, or have his or her suggestions and recommendations as to the hiring, firing,
advancement, promotion or any other change of status of other employees be given “particular
weight.”
Does the employee have the authority to hire or fire assigned employees, or at least the responsibility
to effectively recommend hiring, firing, advancement, promotion, or other change in assigned
employee status? Yes __ No __
a. It does not include occasional suggestions regarding co-workers.
b. Is it part of the employee’s job duties to make such recommendations, and the frequency
with which such recommendations are made, requested, and relied upon? For example, an
employee who provides few recommendations that are never followed would not meet the
requirement
c. A supervisor who provides recommendations on any one of the above specified changes in
employment status may be considered to meet the requirement
d. An employee whose primary duty is ordinary production work or routine, recurrent or
repetitive tasks does not qualify for exemption as an executive even if the employee also
has some supervisory responsibilities.
e. Concurrently (or simultaneously) performing both exempt and nonexempt duties does not
automatically disqualify an otherwise exempt employee from the executive exemption if all
the requirements for exemption are met.
i. For example, if the primary duty of a manager of a retail food service establishment
is management of that establishment, performing work such as serving customers
or cooking food during peak customer periods would not preclude exempt status.
ii. Generally, exempt executives make the decision regarding when to perform
nonexempt duties and remain responsible for the success or failure of business
operations under their management while performing such nonexempt tasks, and
can both supervise subordinate employees and serve customers at the same time
without being disqualified from the exemption. In contrast, the nonexempt
employee generally is directed by a supervisor to perform the exempt work or
performs the exempt work for defined time periods.
Exemption of business owners with 20 percent equity interest
An employee who owns at least a bona fide 20-percent equity interest in the enterprise in which
employed, regardless of the type of business organization (e.g., corporation, partnership, or other),
and who is actively engaged in its management, is considered a bona fide exempt executive. The
salary and salary basis requirements do not apply to the exemption of business owners. An individual
with a 20 percent or greater interest in a business who is required to work long hours, makes no
management decisions, supervises no one and has no authority over personnel does not qualify for
the executive exemption. To qualify for the exemption, a minority owner with at least a bona-fide 20
percent interest in the business must be actively engaged in its management.

3. JOB DESCRIPTION EXAMPLE
Title: COO Manufacturing Job Code: Grade: FLSA: Exempt-Exec
“Executive exemption” is granted since the primary duty of this position is management of a customarily recognized
department or subdivision. This position customarily and regularly directs the work of two or more other employees.
The incumbent’s suggestions and recommendations are given particular weight as to hiring, firing, advancement,
promotion or other change of status of other employees.
□ Primary duty (“Primary duty” means the principal, main, major or most important duty
that the employee performs. Determination of an employee’s primary duty must be based
on all the facts in a particular case, with the major emphasis on the character of the
employee’s job as a whole.) is management of the enterprise
□ ,“management” 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 and 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.) or of a customarily recognized
department or subdivision thereof; (The phrase “a customarily recognized
department or subdivision” is intended to distinguish between a mere
collection of employees assigned from time to time to a specific job or series
of jobs and a unit with permanent status and function.)
□ Customarily and regularly (The phrase “customarily and regularly” means greater than
occasional but less than constant; it includes work normally done every workweek, but
does not include isolated or one-time tasks.) directs the work of two or more other
employees; (The phrase “two or more other employees” means two full-time employees
or their equivalent. For example, one full-time and two half-time employees are
equivalent to two full-time employees. The supervision can be distributed among two,
three or more employees, but each such employee must customarily and regularly
direct the work of two or more other full-time employees or the equivalent. For
example, a department with five full-time nonexempt workers may have up to two
exempt supervisors if each supervisor directs the work of two of those workers.) and
□ Has the authority to hire or fire other employees or whose suggestions and
recommendations as to the hiring, firing, advancement, promotion or any other change of
status of other employees are given particular weight. (Factors to be considered in
determining whether an employee’s recommendations as to hiring, firing,
advancement, promotion or any other change of status are given “particular weight”
include, but are not limited to, whether it is part of the employee’s job duties to make
such recommendations, and the frequency with which such recommendations are
made, requested, and relied upon. Generally, an executive’s recommendations must

4. pertain to employees whom the executive customarily and regularly directs. It does not
include occasional suggestions. An employee’s recommendations may still be deemed to
have “particular weight” even if a higher level manager’s recommendation has more
importance and even if the employee does not have authority to make the ultimate
decision as to the employee’s change in status.)
GENERAL SUMMARY
Design, develop and execute a business strategy that address all critical aspects of a systems integrator competing
in both domestic and international markets. Develop and implement supporting tactical plans in manufacturing
operations. Ensure that the support disciplines of human resources, information resources, and finance fully support
the line operations. Keep the corporation apprised of all key developments and provide subordinates the outstanding
leadership that is expected of a general manager. Actions and decisions have a direct impact on the long-term future
of the business in virtually every area including engineering, operations and domestic and international markets.
Actions and decisions on a short-term basis have a direct impact on corporate profits and share prices.
PRINCIPAL DUTIES AND RESPONSIBILITIES
- Direct all aspects of production operations including P&L, in an organized method to establish and maintain
company/industry standards in plant efficiency, product quality, customer service, plant sanitation (EPA), and
employee safety (OSHA).
- Direct/lead/support engineering and capital projects, quality assurance, and product development activities, sales
and customer service efforts, productivity improvements, personnel and employee relations programs and
initiatives, accounting and financial practices and analysis, and good community relations.
- Design, develop and execute a business strategy that addresses all critical aspects of a systems integrator
competing in both domestic and international markets.
- Direct all aspects of components manufacturing, assembly, quality control and building of, or improving,
manufacturing operations for the company. This includes translating strategic goals into achievable line-of-site
stretch-objectives, new product and process introduction, quality metrics, lean manufacturing, and initial
component technology research.
- Work closely with operations director/managers - design, develop and execute operational plans that
successfully meet customer expectations and strategically set financial goals.
- Work closely with department directors/managers to support the design, develop and execute marketing and
operational plans that capture and execute business in accordance with the business strategy.
- Work closely with the directors of human resources, information resources and finance to ensure that these
support disciplines provide cost effective, superior service to the line organization.
- Provide policy and personal leadership in key organization initiatives: diversity, total quality management, ethics,
waste minimization, training and education, and people development.
- Contribute broadly to the strategy, culture and operations of the company as a member of senior management.
- Identify, evaluate, select, and negotiate supply agreements and serve as primary contact with
key component suppliers, including negotiating contract, maintaining strong relationships and
effective communication, verify quality and availability of materials,
- Lead manufacturing line transfer, installation, qualification, validation, and commercial start-up.
- Ensure that suppliers are allocating sufficient, competent resources to our programs.
- Ensuring that suppliers are following Quality Assurance practices.
- Ensure that adequate and appropriate technical support is provided by the company to
suppliers.
- Ensure that the manufacturing equipment is appropriately maintained.
- Ensure that excess production equipment is properly warehoused and inventoried.
- Ensure that appropriate levels of inventory and adequate storage capacity throughout the
production cycle are forecast and maintained.
- Wherever feasible in the process ensure that there are second sources of supply and/or
emergency contingency plans.
- Ensure that there is an efficient distribution system in place for the final product.
- Working with Product Development and suppliers to develop and implement cost reduction
programs.
- Maintain close working relationship with product development, regulatory and commercial staff.
- Hire, train and manage the Manufacturing and Supply Chain organizations and their budgets.
- Participate in special projects and perform other duties as necessary and required.
- Resolves employee issues, concerns, and problems within limits of company policies and practices.

5. - Contacts requiring judgment and tact in presentation occur frequently with individuals in administrative or
executive positions and high-ranking customers and include important daily interactions with staff requiring
consultation on problems.
- Probable errors may cause serious delays in operation; errors in decisions and recommendations may be costly
to company and have important effects on labor relations.
- Provide leadership for the shared responsibility of employee development.
- Ensures that the employees and the work environment are compliance with OSHA regulations and company
safety objectives.
- Performs other duties as necessary and appropriate to this position.
KNOWLEDGE, SKILLS, AND ABILITIES REQUIRED
1. B.S. degree in Engineering, Business, Production Management, Computer Science, or related field.
2. Minimum ten years’ manufacturing experience, three years management level experience in Manufacturing
Operations management including at least 5 years direct management experience with proven positive
results in process improvement, material and strategic planning.
3. Must have demonstrated knowledge of manufacturing and quality principles and government regulations;
engineering; information systems; and, effective supplier/customer interface.
4. Demonstrated ability to supervise, motivate, train and evaluate personnel.
5. Excellent communication skills.
6. Experience working within a non-union environment with proven leadership in a production/manufacturing
setting.
7. Demonstrated applied knowledge of manufacturing processes and procedures and proven results in
prioritizing and addressing multiple issues.
KEY RELATIONSHIPS
Fulfills the most senior executive role responsible for leading and directing the manufacturing and supply chain
activities for the company and is a key participant within the senior management team. This position will be
responsible for all contract manufacturers as well as upstream vendors and downstream distribution channels.
Constant contact with the President & CEO of (insert Company name). Constant contact with the (insert Company
name) directors and key managers. Constant contact with members of the (insert Company name) Executive
Operating Committee. This contact is to ensure effective Manufacturing operations and proper resource allocation.
WORKING CONDITIONS
PHYSICAL DEMANDS
While performing the duties of this job, the employee is occasionally required to stand; walk; sit; use hands
to finger, handle, or feel objects, tools or controls; reach with hands and arms; climb stairs; balance; stoop;
kneel; crouch or crawl; talk or hear. The employee must occasionally lift and/or move up to 50 pounds.
Specific vision abilities required by the job include close vision, distance vision, peripheral vision, depth
perception, and the ability to adjust focus. The work schedule for this classification is full-time. Incumbents
must work a full-time forty (40) hours per week schedule with occasional overtime based on meeting
schedules and deadlines.
WORK ENVIRONMENT
While performing the duties of this job, the employee is not normally exposed to normal indoor non-air-
conditioned temperatures and may on occasion work in seasonal outdoor weather conditions. The noise
level in the work environment is usually low to moderate where hearing protection is necessary based on
OSHA requirements. Work environment characteristics described here are representative of those that must
be met by an employee to successfully perform the essential functions of this job. Reasonable
accommodations may be made to enable individuals with disabilities to perform the essential functions.
REPORTING RELATIONSHIP
Reports to: President and CEO of <Insert Company Name>
Approvals and Dates
President & CEO
President & CEO Signature Title Date
Vice President, Human Resources
VP Human Resources Signature Title Date

6. The above is intended to describe the general content of and requirements for the performance of this job. It is not to
be construed as an exhaustive statement of duties, responsibilities or requirements. The principal duties and
responsibilities enumerated are all essential job functions except those that begin with the word “May.”

7. The above is intended to describe the general content of and requirements for the performance of this job. It is not to
be construed as an exhaustive statement of duties, responsibilities or requirements. The principal duties and
responsibilities enumerated are all essential job functions except those that begin with the word “May.”