Executive Capacity:
To qualify as having executive capacity, a position must fulfill some or all of the following criteria:
- Direct the management of the organization or a significant component or function.
- Establish goals and policies for the organization, component, or function.
- Exercise considerable discretion in decision-making.
- Receive general supervision or direction from higher-level executives, the board of directors, or shareholders of the organization.
Managerial Capacity
To satisfy the definition of managerial capacity, a position must fulfill some or all of the following criteria:
- Manages the organization, a department, subdivision, function, or component thereof.
- Supervises and oversees the work of other supervisory, professional, or managerial employees, or manages a critical function within the organization or a department/subdivision.
- Holds the authority to make personnel decisions such as hiring, firing, and recommending promotions or leaves; if no direct supervision is involved, operates at a senior level within the organization’s hierarchy or concerning the managed function.
- Exercises discretion in the day-to-day operations of the activity or function over which the employee has authority.
Specialized Knowledge
To fulfill the definition of specialized knowledge, a position must necessitate both proprietary knowledge and advanced expertise, which are defined as follows under NAFTA:
- Proprietary Knowledge: Refers to company-specific expertise related to a company’s products or services, implying that the company has not disclosed specifications enabling other companies to replicate the product or service.
- Advanced Expertise: Denotes specialized knowledge acquired through substantial experience (with the understanding that the longer the experience, the more likely the knowledge is genuinely specialized) and recent experience (within the last 5 years) with the organization. This expertise is utilized by the individual to make significant contributions to the employer’s productivity.