It can be difficult to determine which employees are legally entitled to overtime. The Fair Labor Standards Act (FLSA) is the federal law that requires employees to be paid overtime if they work more than 40 hours in a week. However, the law doesn’t apply to all employees. It has exemptions for salaried employees who earn at least $684 per week and whose job duties fit into certain categories. The problem is that employers are constantly struggling to determine which employees’ job duties fit into those exemptions. When I am struggling with an idea, I like to reframe it in simpler terms that make sense to me, and one way to do so with the FLSA is to think of these exemptions in terms of the characters from one of my favorite sitcoms, The Office. Below is a description of the primary overtime exemptions and who they might apply to in the Scranton branch:
Executive Exemption: Michael Scott, Regional Manager. An executive may be exempt if: 1) their primary duty is managing the business or a division of the business, 2) they regularly supervise at least two people, and 3) they have the authority to hire and fire. Michael Scott is the head of the Scranton branch and supervises the entire staff. Over time, he hired and fired a few employees. In short, he is the boss, and he is exempt from overtime. One might think Warehouse Manager Darryl Philbin also meets the executive exemption, but he probably does not. While he manages the warehouse and supervises several employees, his primary duty is not supervising, as he also performs extensive manual work in the warehouse.
Administrative Exemption: Angela Martin, Head of Accounting and Toby Flenderson, Head of Human Resources. Employees may qualify for the administrative exemption if: 1) their primary duty is office or non-manual work that directly relates to management or operations of the business and 2) their primary duty includes using discretion and independent judgment regarding significant matters. Angela Martin and Toby Flenderson fit this exception. They run departments that help keep the Scranton branch’s operations moving. In doing so, they exercise discretion over important matters to the office. The Scranton branch has other employees in administrative functions – Oscar Martinez and Kevin Malone in Accounting, Meredith Palmer in Supplier Relations, and Creed Bratton in Quality Assurance come to mind. However, it is unclear whether they exercise enough independent judgment in their roles to qualify as exempt, as they rarely appear to take charge on important business matters. An employment lawyer would need to study their job descriptions carefully to determine whether they qualified. There are plenty of close calls as to who is exempt and who is not.
Professional Exemption: No One? The professional exemption requires an employee to perform work requiring advanced knowledge and consistent exercise of discretion in a field of science or learning. The employee typically must have an advanced degree or some other prolonged course of specialized study. This includes doctors, lawyers, scientists, pharmacists and the like. No one at the Scranton branch easily fits into this exemption.
Outside Sales Exemption: Todd Packer, Outside Sales Representative. Salespeople qualify for exemption only if: 1) their primary duty is making sales and 2) they are customarily and regularly engaged away from the employer’s place of business. Outside salespeople must regularly visit customers’ places of business. It is not enough to make sales from the office or from home – travel to customers must be key to the salesperson’s role. As such, Jim Halpert, Dwight Schrute, Stanley Hudson and Phyllis Vance are not exempt, as they customarily sell paper from the office and only occasionally make sales calls. Only the seldom-seen Todd Packer qualifies. After all, he is seldom seen because he is consistently traveling outside the office to make sales.
Computer-Related Exemption: Perhaps Some Late-Season IT Guys? The final exemption is for computer employees. Computer systems analysts, programmers, software engineers and similar employees may qualify if they consistently perform high-level computer systems or program work. The classic seasons of The Office didn’t have any computer-related employees, although the later seasons featured a few IT workers. Whether their computer work was sophisticated enough to qualify for the exemption would depend on how their job descriptions characterized their jobs.
The Office has a fairly typical office setup, and your business may have people in roles similar to the Scranton branch. Hopefully this breakdown will give you a better idea of who may be exempt and who likely is not exempt from overtime eligibility. However, it is always best to check with an employment lawyer before determining which employees are paid for their overtime work and which employees are not.
This article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.
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