Before you classify supervisors as exempt executive employees, make sure you've given them enough authority to make that classification stick. That meanstrue hiring/firing power with the clear understanding that your organization will typically follow the supervisors' recommendations.
If you give power in name only, the Labor Department or courts could reclassify your managers as nonexempt, hourly employees. And that could cost you big bucks in overtime pay and fines.
Recent case: A Delaware chicken farm employed five crew leaders to transport "chicken-catcher" workers to the farm and supervise them as they caught birds. The farm classified the crew leaders as exempt executive employees and refused to pay overtime or travel time. Reasoning: Crew leaders could suggest who should be hired or disciplined.
The crew leaders sued, claiming they should be classified as nonexempt and receive overtime. A federal court agreed, saying it takes more than mere hiring and discipline suggestions to earn executive-exemption status. Employers must show that they nearly always follow through on those suggestions. (Davis, et al., v. Mountaire Farms, Inc., No. 05-3982, 3rd Cir., 2006)
Bottom line: Make sure your exempt executive employees play a major role in employment decisions. If they don't, you have two choices: (1.) Reclassify their jobs as nonexempt and pay overtime, or (2.) beef up their roles to make sure you give their hiring/firing suggestions "particular weight." (That can simply involve pulling supervisors intoand personnel decisions.)
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/1985/executive-exemption-requires-true-hiringfiring-authority "
- The hard truth by 'Z': Level with employees about the good, the bad & the ugly
- Supreme Court rules on pre-employment tests and disparate impact
- Use absenteeism point system to avoid favoritism disputes
- Interviews: The legal way to ask 5 risky questions
- College degree doesn't automatically make applicant the better qualified candidate