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When in doubt, note multiple FLSA exemptions

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in Leaders & Managers,Management Training

Under the Fair Labor Standards Act (FLSA), employees fit into one of two general categories—they are either hourly or exempt. Hourly employees get overtime for work over 40 hours per week; exempt employees don’t.

While U.S. Department of Labor regulations provide examples of the many exemptions available under the FLSA, it can still be hard to figure out where some positions fit. And sometimes, an employee’s job may seem to fit into more than one category.

If that’s the case, don’t be shy about noting that in the job description. The fact is, courts often consider more than one exemption when determining whether an employer is entitled to classify an employee as exempt.

Recent case: Patty Lee Smith worked for Johnson & Johnson as a “professional sales representative” and was classified as exempt. She joined a class-action overtime lawsuit, claiming she should have been classified as hourly.

Johnson & Johnson said Smith was exempt either under the outside sales exemption or the administrative exemption.

The court rejected the first classification because Smith didn’t actually sell prescription drugs to the doctors in her territory. She just encouraged them to prescribe specific drugs, thus driving sales to pharmacies in the area. The outside sales exemption clearly requires actual sales.

But Johnson & Johnson scored on the administrative exemption, which requires nonmanual or office work related to company management or business operations and the exercise of discretion and independent judgment in carrying out the job’s primary duties.

Because Smith, among other things, had little direct supervision and was responsible for growing her territory, she met the administrative exemption. (Smith v. Johnson & Johnson, No. 06-4787, DC NJ, 2008)

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