Probably the most common — and confusing — exceptions to the overtime laws. Employees whom the law defines as “administrative, executive, or professional” need not be paid overtime.

To fit into one of these exemption categories, you must be paid on a salary basis and must spend most of your time performing job duties that require the use of discretion and independent judgment.

Job Duties

You must be performing certain types of work — generally, work that requires an advanced degree, is managerial or supervisory in nature, or requires you to make relatively high-level business decisions. Here are the basic requirements for the administrative, executive, and professional exemptions.

Administrative employee

  • Primarily perform office or non-manual work related to the ministry’s management or business operations. Examples: business administrators, daycare directors, school principals.
  • Use “discretion and independent judgment” in making decisions regarding significant matters. (Most support staff and clerical workers don’t meet this standard.)



Executive employee

  • Primarily perform management duties.
  • Regularly supervise at least two full-time equivalent employees (not volunteers).
  • Have authority or significant influence in hiring, firing, discipline, and promotion decisions affecting employees.

Professional employee

  • Do work requiring advanced knowledge in a field of science or learning, such as theology, teaching, accounting, or law. Examples: clergy, teachers.



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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

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