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Employee doing more than one job? Make sure all fit FLSA exempt status

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in Leaders & Managers,Management Training

In these hard economic times, lots of businesses are restructuring jobs to cut costs. Sometimes that involves assigning an employee to perform two very different kinds of work.

If you find yourself asking exempt employees to double up like that, be careful not to run afoul of the Fair Labor Standards Act (FLSA), which requires overtime pay for nonexempt work that takes the employee beyond 40 hours in a workweek.

While many employees may just be glad they still have full-time employment, others may see an opportunity for a wage-and-hour lawsuit.

Advice: The solution is to make sure that both jobs being performed fit into one of the exempt categories—though not necessarily the same one. If that isn’t possible, your best bet may be to create two part-time positions instead of combining the positions into one.

Recent case: Tammy Schmidt worked for Eagle Waste & Recycling, primarily as a commissioned outside salesperson. She earned a base salary plus commissions and spent most of her time calling on customers. The time she spent in the office was mostly devoted to maintaining customer databases and arranging sales calls.

But, when the company lost several employees, she received additional duties, including creating marketing campaigns, collecting on accounts and negotiating with customers over sales and service credits.

She sued for overtime pay, claiming she wasn’t an exempt employee. The company argued that each of her jobs was exempt under the FLSA.

An appellate court agreed. First, she was exempt as an outside salesperson. That part of her job involved making sales or obtaining orders or contracts for services, customarily working away from the employer’s place of business.

And her office tasks met the test for exempt administrative work—her base salary met the $455-per-week salary or fee basis, and her primary duty while in the office was the performance of office or nonmanual work directly related to the management or general business operations of the company. Plus, she exercised discretion and independent judgment when she negotiated payments and credits and created marketing materials.

Because all aspects of her job fit into exempt categories, the court said she was an exempt employee. (Schmidt v. Eagle Waste & Recycling, No. 09-1902, 7th Cir., 2010)

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