Deciding who’s exempt? Focus on employee’s duties, not job title — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Deciding who’s exempt? Focus on employee’s duties, not job title

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in Leaders & Managers,Management Training,Performance Reviews

Twenty former Tennessee Valley Authority (TVA) employees won back overtime pay when they sued under the Fair Labor Standards Act. The workers successfully argued that they were wrongly classified as exempt executive and administrative employees.

The employees held four different positions, but the judge ruled that none of the jobs qualified under the Labor Department's "short test" for either exemption. One main reason: Many of the workers followed strict procedures and had little or no discretion in how they did their jobs. For example:

  • Nine security shift lieutenants said they "supervised" 15 to 30 officers. But their duties did not rise to the level of management under the executive exemption.
  • Nine shift supervisors spent much of their time doing clerical work, like completing payroll forms. They didn't direct other employees and had no authority to discipline them.
  • When a program manager's duties changed from writing security plans to making only typographical changes to administrative orders, he no longer qualified as an administrative employee.

In its defense, the TVA pointed to the workers' job descriptions, performance reviews and rÈsumÈs to show that the workers had management and supervisory duties. But the judge said the documents were too vague and didn't reflect the true day-to-day work being done by the 20 workers. (Ale v. Tennessee Valley Authority, No. 99-6642, 6th Cir., 2001)

Advice: To determine whether an employee is exempt from overtime pay, focus on the same thing a court would, the actual work he performs, not on his title or job description. As the court said, the words "in charge" are not a magical phrase that renders an employee a bona fide executive regardless of his actual duties.

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