White Collar Exemptions: those applicable to executive, administrative, professional, outside sales, and computer professional employees. Excluded from overtime eligibility.
- SALARY LEVEL TEST: $455 per week. Anyone earning less is not exempt.
Exceptions:
- Lawyers, physicians, teachers, and any outside sales reps regardless of minimum salary; and
- Highly compensated employees: anyone earning $100,000 per year is deemed exempt, if he or she earns $455 per week on a salary or fee basis, and customarily and regularly performs any one or more exempt duties, and performs office or non-manual work.
- SALARY BASIS TEST: cannot reduce salary based on quantity or quality of work (no docking requirement)
Exception: Disciplinary suspension of less than one week. Can discipline of one day or more if imposed in good faith for infractions of workplace conduct rules such as sexual harassment, workplace violence, or drug or alcohol infractions: provided suspensions are imposed pursuant to a written policy applicable to ALL EMPLOYEES. Notice of unpaid disciplinary suspension must be clear in the policy.
Workplace conduct rules do NOT include rules related to performance or ATTENDANCE issues. You can determine employee's salary or compute on an hourly, daily or shift basis.
There is no requirement to pay an exempt employee during week in which he or she performs no work for the employer.
The employer won't lose exemptions only if the employer has an actual practice of making improper deductions,
Factors:
- The number of deductions;
- The time period of the deductions;
- The number and geographic location of employees whose salaries were improperly reduced;
- The number and geographic location of managers responsible for such deductions; and
- Whether the employer had a clearly communicated policy prohibiting improper deductions.
Safe Harbor
An employer will not lose exemption for any employees if the employer:
- Has a clearly communicated policy prohibiting improper deductions and the policy includes a complaint mechanism;
- Reimburse employees for any improper deductions; and
- Makes a good faith commitment to comply in the future - unless the employer willfully violates the policy: usually when the employer is still violating the policy even after the employee complains.
Duties Test
Executives: primary duty is management of the enterprise or a recognized department or subdivision. Customarily and regularly directs the work of two or more other employees. 3) Has authority to hire or fire other employees (or recommendations as to hiring, firing, advancement, promotion or other change of status are given particular weight).
Administrative: Primary duty of performing office or non-manual work directly related to management policies or general business operations of the employer or the employer's customers. Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance."
Learned professional: Primary duty of performing work requiring advanced knowledge in a field of science or learning customarily acquired by prolonged course of specialized intellectual instruction.
Creative Professional: Primary duty is the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
Teachers: Primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge and who is employed and engage in this activity in an educational establishment by which the employee is employed.
Computer Professional: Primary duty is 1) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications; 2) the design, development, documentation, analysis, creation, testing or modification of computer system s or programs, including prototypes, based on and related to user or system design specifications; 3) the design, documentation testing, creation or modification of computer programs related to machine operating systems; or 4) a combination of the aforementioned duties, the performance of which requires the same level of skills.
Outside Sales Professional: (no salary minimums): employed for the purpose of and customarily and regularly engaged away from the employer's place or places of business in making shares or obtaining orders or contracts for services or for the use of facilities. Hours spent on non-sales work do not exceed 20% of the hours worked in a workweek by nonexempt employees of the employer.
New Important Overtime Cases
Posely v. Eckerd Corp., F.Supp.2nd, 2006 WL 1366737, S.D.Fla., 2006.
Store managers, for themselves and as representatives of purported class, sued retail pharmacy chain, claiming to have been undercompensated and asserting various state and federal causes of action including claims under Fair Labor Standards Act (FLSA). Chain moved for summary judgment.
The District Court, held that:
- in absence of "work parties," store managers' primary duty under applicable former FLSA "short test" was management;
- their attendance at work parties did not alter store managers' status as bona fide executive employees exempt from FLSA overtime requirements;
- FLSA's minimum wage provisions were not violated;
- Florida statute declaring ten hours of labor a "legal day's work" and requiring "extra pay" for all work performed in excess of 10 hours daily was unconstitutionally vague;
store managers were not entitled to payment for those hours based on quantum meruit theory; and - chain's alleged discovery violations did not require denial of summary judgment
