As a U-Haul field manager, William Whitesides spent a lot of time on the road visiting dealerships. But soon after he had an accident, Whitesides was reassigned to office work, where he had a set schedule and had to work under a supervisor.
When he arrived 15 minutes late on the first day, he was suspended without pay for three days. A few months later, he was fired for.
Whitesides sued for overtime, claiming he was improperly classified as an exempt administrative employee. A lower court rejected his claim, but the state Supreme Court sided with him.
To qualify as an exempt administrative employee under state law, the court said, a worker must be paid on a salary basis and work under only general supervision. U-Haul failed on both counts.
U-Haul had tried to make a partial fix. Two years after the firing, the company did admit that it made a mistake in withholding pay for the three-day sus-pension. It sent him a check, in-cluding interest. But that fix came too late to take advantage of the "window of correction" for paying an employee who was supposed to be on salary. (Whitesides v. U-Haul Co. of Alaska, No. S-9204, Alaska S. Ct., 2001)
Advice: Be careful not to ease employees who are nonexempt into salaried positions by simply giving them a fixed income.
Also, don't treatlike hourly employees by taking small deductions and penalties from their paychecks. That's one of the most common ways to lose the exemption.
Note: Get advice on the exemption rules and other Fair Labor Standards Act details at the Labor Department's Web site, www.elaws.dol.gov/.
Who is exempt?
Call us at (800) 543-2055 and we'll fax you our free, two-page checklist, Exempt vs. Nonexempt: Where to Draw the Line.
For more advice on the FLSA, order NIBM's newest book, You and the FLSA, by calling (800) 543-2055 or visiting www.nibm.net.