29 CFR 541.100-106The FLSA Executive Exemption: Managers, Supervisors, and the 2+ Employee Rule
A job title of "manager" or "supervisor" means nothing under the FLSA. The executive exemption requires a four-part test - and the part that most often fails in litigation is the one vendors rarely explain: what counts as actual management when the employee is also doing the same work as their team.
The four-part executive exemption test
Salary $684/week
541.600The employee must be paid on a salary basis at a rate of not less than $684 per week (the 2019 federal threshold, currently in force). Many states require significantly more - California $1,352/wk, Washington $1,541.70/wk, New York metro $1,275/wk. The higher state threshold always applies.
Primary duty is management
541.100(a)(2)The primary duty must be management of the enterprise in which the employee is employed or of a customarily recognised department or subdivision thereof. 'Primary duty' means the principal, main, major, or most important duty - not merely a duty that occupies the most hours.
Direction of 2 or more full-time employees
541.104The employee must customarily and regularly direct the work of two or more other full-time employees (or their equivalent). Part-time employees count proportionally: two half-time employees constitute the equivalent of one full-time employee. The employee must direct an equivalent of 80 hours of subordinate work per week.
Hire/fire authority or weighted recommendation
541.100(a)(4)The employee must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.
What counts as "management"
Under 29 CFR 541.102, management activities include:
The "customarily recognised department" requirement
The executive exemption applies to management of the enterprise itself or of a "customarily recognised department or subdivision thereof." This requirement has real teeth. A department or subdivision is customarily recognised when it has a permanent status and a continuing function. A project team assembled for a temporary assignment is not a customarily recognised department. A temporary task force created for a single project does not qualify.
Practical example: a supervisor managing the "returns department" at a retail store - a permanent function with assigned staff - likely manages a customarily recognised subdivision. A supervisor managing a temporary new-store-opening team assembled for six weeks likely does not, because the team lacks the permanence the regulation requires.
The concurrent duties rule
Under 29 CFR 541.106, exempt managers may perform non-exempt work concurrently with management duties and still be exempt, if management is their primary duty. The classic example is a working manager at a small restaurant who cooks or serves tables while also supervising staff. Whether such an employee is exempt depends on all the circumstances, including the nature of the establishment and how much time the employee devotes to each type of work.
However, this rule has limits. An employee who primarily does production work and only occasionally supervises - even if they have the job title of manager - is not executive-exempt. Courts look at what the employee really is: a manager who also does some hands-on work, or a worker who occasionally tells others what to do.
Concrete examples
Assistant manager at a big-box retailer, $52k salary, 80% of shift on the floor doing the same work as hourly associates
Despite the title and salary above $684/wk, the primary duty is not management - it is the same non-supervisory sales and stocking work as hourly employees. The DOL and multiple courts have found identical fact patterns non-exempt in litigation against Dollar General, Walmart, and similar chains. The assistant manager must be paid overtime for all hours over 40.
Shift supervisor at a fast-food chain, $45k salary, manages 3 crew members, assigns work, handles complaints, but also works the fryer
Management is the most important aspect of the position even if it occupies less than 50% of clock time. The supervisor provides value to the employer primarily because of the ability to manage the shift, not because of cooking skills any crew member has. Exempt if the employer genuinely gives weight to the supervisor's staffing recommendations. Not exempt if 'recommendations' are routinely ignored or require upper-management sign-off on every decision.
Project manager at a consulting firm, $95k salary, runs client projects but manages no employees directly
The executive exemption requires directing the work of two or more employees. Managing a client project and managing employees are different things. This employee may qualify for the administrative exemption (if exercising real discretion on significant business matters) but does not qualify for the executive exemption because the employee does not supervise staff.
Restaurant manager, $70k salary, oversees two shifts with 8-10 staff, interviews and hires, handles scheduling and performance reviews
This scenario hits all four prongs: salary above threshold, management as primary duty, direction of 2+ FTEs, genuine hire/fire authority. The employee may also do some food prep or service during busy periods under the concurrent duties rule, but management is the primary duty based on importance to operations, relative freedom from supervision, and salary premium over hourly staff.
California's stricter version
California does not follow the federal primary duty test for the executive exemption. Under California law, an employee must spend more than 50% of their work time on exempt duties to qualify. The federal flexible test - where management can be primary even if it occupies less than 50% of clock time - does not apply in California.
For multi-state employers with California operations, this is a critical distinction. An employee who qualifies as executive-exempt under federal law (and in 48 other states) may not qualify under California law if they spend more than half their time on non-exempt tasks. California also requires a $1,352/wk salary threshold in 2026, more than double the federal floor.
Educational content only. Employment classification is fact-specific; consult an employment attorney or your state labour department. Data verified April 2026.