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Factor in employee discretion when tech changes start to affect FLSA classifications

by on
in Human Resources,Overtime Labor Laws

As the world of work becomes more technologically driven, some employees are seeing their job responsibilities change.

Sometimes, the changes make the job easier because tasks are automated. Other times, the effect is the opposite, creating a more complex, diversified position that relies on discretion and the exercise of independent judgment.

Those jobs may then change from hourly to exempt under the FLSA.

Recent case: Penny Verkuilen worked for a software company that sold increasingly specialized and customized software for various media companies. Her job involved visits to customers, consultation and lots of interaction as she worked with clients to come up with solutions that were technically feasible and met sophisticated needs.

Verkuilen sued, claiming she should have been paid for all hours over 40 she worked during a week.

Her employer said she was exempt under the Fair Labor Standards Act’s administrative exemption. It argued that she used independent judgment to customize software offerings for her clients. That, the court concluded, was the essence of the administrative exemption. As the court pointed out, she wasn’t selling packaged soft­ware at Best Buy. (Verkuilen v. Media­Bank, No. 10-3009, 7th Cir., 2011)

Final note: The more independence and flexibility an employee has, the more likely she should be classified as exempt. The court noted that employees like Verkuilen work independently and that their em­ployers typically don’t keep close tabs on hours worked. Those were other contributing factors in its conclusion that she wasn’t eligible for overtime pay.

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