Washington’s new law also amends the duties test for the administrative exemption. The test still requires the employee’s primary duty: (i) to be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (ii) to include the exercise of discretion and independent judgment with respect to matters of significance.
The new rule clarifies that:
- “Directly related to management or general business operations” means work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment; and
- “Discretion and independent judgment” means: “the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered, and specifies that the phrase “discretion and independent judgment” must be applied in the light of all the facts involved in the particular employment situation in which the question arises.
The new rule explains:
The exercise of discretion and independent judgment implies that the employee has the authority to make an independent choice, free from immediate direction or supervision. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources. The exercise of discretion and independent judgment also does not include clerical or secretarial work, recording or tabulating data, or performing other mechanical, repetitive, recurrent or routine work.
As with the old rule, new rule provides that the employee must be compensated on a salary or fee basis, exclusive of board, lodging,or other facilities.
Finally, the new rule has two express provisions addressing the administrative exemption in educational establishments. First, the rule says that the term “individual employed in a bona fide administrative capacity” includes an “individual whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment or department or subdivision thereof.” Second, the rule provides that exempt administrative employees in academic/educational establishments may also be compensated on “a salary basis which is at least equal to the entrance salary for teachers in the educational establishment by which they are employed.”
Next week we will post about changes to the duties test for the professional exemption.