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Exempt Employee: What Is The Level Of Discretion That Qualifies?

Professional man and woman in a business meeting setting. Our clients have generally recognized that providing an employee with a salary is not enough to exempt that employee from overtime. The Fair Labor Standards Act (FSLA) established the forty (40) hour week, minimum wage, overtime and what jobs were exempt from these requirements.

The administrative exemption to FSLA requirements permit an employer to classify an employee who is engaged in performing bona fide administrative functions providing non-manual work directly related to management or business operations where the primary duties performed require exercise of judgement and discretion in matters of significance. Such an employee is paid a minimum required salary and is not eligible for overtime if they work more than forty (40) hours a week.

In a recent case decided by the US District Court in Florida, a law firm employee, who performed duties in the real estate department, such as reviewing title, preparing portions of title policies, attending real estate settlements and transferring money from the settlements, did not qualify as exempt from overtime on the basis of these duties.

The court determined, based on her job description, that the employer had not proved that the employee actually exercised independent discretion. Rather she was carrying out procedures and meeting standards that are stated in manuals. The court emphasized that “independent discretion” requires evaluating and comparing several choices before making a decision without oversight or supervision.

In the current environment, we encourage our clients who are employers to provide clear job descriptions for all exempt employees and to ensure that all qualifications are met. In this case, if the law firm had described the employee’s duties to demonstrate her independent discretion, this case may not have gone to court.

We urge our clients to perform a regular audit of their employee’s duties and the corresponding job description to confirm they are accurate and that exempt employees are properly qualified. If you wish to discuss this or other employment law matters, please do not hesitate to reach out to Howard Metro by email at or by phone at (240) 778-2303.