Office business manager: Exempt or nonexempt?

Q. We’re a nine-physician medical clinic, and we employ a salaried business manager. She makes less than $100,000 but more than $23,660 per year. Her duties include personnel, hiring and firing, and office work. We don’t give her comp time or overtime pay. If she takes a partial day off, she must use vacation time (paid time off). In light of the new (FLSA, overtime) rules, are we handling this correctly? —B.B., Missouri

A. Three white-collar exemptions exist under wage-and-hour law: executive, administrative and professional. It’s clear that the business manager isn’t a professional. But based on the job duties you describe, she may or may not meet the executive or administrative exemptions. We can’t make that determination without more facts. Run the facts by your labor attorney for an opinion on exempt status.

One key point to consider: To qualify as exempt, employees must be paid on a salary basis. That means a predetermined fixed salary, which is generally not subject to deduction based on the work quality or number of hours. Your practice of making salary deductions based on part-day absences for personal reasons is fine, as long as the manager still has leave time in the bank. Making deductions after she exhausts her leave bank would be a big “no-no.”

Final note: If you reclassify this employee, do so with finesse. That means “selling” the change as a benefit (i.e., “the company appreciates your work so much that we’re going to provide you with overtime”). Or, implement the change at the same time you make other policy changes to draw the spotlight away from the reclassification. Never tell employees that they’re being reclassified to comply with the law. That implies that the company has violated the law in the past.