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Worker classification: Salary is just one factor that determines exempt status

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in Human Resources,Overtime Labor Laws

Don’t make the mistake of thinking that just because an employee is paid a salary, he or she is exempt. The employer must also show that the worker performed exempt work under one of the several exemptions available under the Fair Labor Standards Act.

Recent case: While working as a manufacturing engineer for Dril-Quip, Ronald was paid between $72,500 and $88,500 per year on a weekly salary basis. He did not have a college degree, having completed just one year of higher education. His job was to manage the manufacturing process for specific products so they were produced according to sales for that week.

Ronald sued, alleging that he was wrongly classified as an exempt employee and should have earned overtime for all hours beyond 40 he worked.

Dril-Quip argued he was an exempt administrative employee. Ronald argued that his job required no discretion or exercise of judgment and that he merely followed guidelines. His employer disagreed.

The court said that the case should go to trial so a jury can decide whether he was exempt or an hourly employee entitled to overtime. His high salary alone didn’t determine his status. (Elliot v. Dril-Quip, No. H-14-1743, SD TX, 2015)

Final note: Although Ronald was classified as an engineer, he held no degree. That precluded his classification as an exempt professional employee. Remember, what you call an employee isn’t important, nor is what his job description says he does. What matters is what the employee actually does.

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