Martocchio Case Study Exempt Or Nonexempt

2. Do you think that the shift leaders are properly classified as exempt? Why or why not?I think the shift leaders are not properly classified under FLSA’s overtime pay exemption standards. Shift leaders perform some managerial duties and some associate duties. Jane stated that she spends more than half her time performing associate duties. Because shift leaders are neither fully a manager nor fully an associate, but are acting as both in some cases, they should be entitled to the benefits of both positions. The shift leaders should be paid overtime for any additional hours worked. 3. What are some factors that Amy should consider when determining if shift leadersare exempt or nonexempt?Amy should know the difference between exempt and nonexempt duties that are performed at the store. She should also be aware of how many hours each shift leader spends performing exempt (managerial) and nonexempt (associate) duties. Amy should know every shift leader and associates’ wages so that they are being compensated properly, especially if many are performing the same work. Lastly, Amy should consider the Fair Labor Standards Act of 1938 and the FairPay Rules. FLSA classifies “executive” responsibilities as “managementof the enterprise or a recognized department or subdivision.” FairPay Rules states “workers earning less than $23,660 per year, or $455 per week are guaranteed overtime protection.” These factors will help Amy determine whether or not shift leaders should be exempt or nonexempt.

Dear Rita in HR: Should social workers be classified as exempt or nonexempt? In the process of updating our job descriptions I have looked at many from other agencies and am confused in particular about one issue: in some cases social workers are classified as exempt (exempt from overtime) and in other cases they are nonexempt. What are they? Signed, Dazed & Confused

Dear Dazed: Good news! We received some clear guidance last week with the first federal appellate decision directly addressing the overtime exempt status of social workers in Solis v. State of Washington DSHS (9th Cir. 2011) No. 10-35590. The quick answer is that some, but not all, social workers meet the professional exemption -- and surprisingly, it doesn't only depend on the job duties: it also depends on the educational prerequisites of the position.

The Solis court held that the Washington social workers were not exempt from the Fair Labor Standards Act (FLSA). The responsibilities of the social workers in the Solis case look at first glance as if they would make the positions exempt. For example, they were responsible for:

  • Investigating child abuse and neglect
  • Developing and recommending treatment plans to courts
  • Evaluating child and family progress in meeting treatment plans
  • Placing children, and
  • Recommending whether parental rights should be terminated.

But the court stated they were nonexempt not because of the job duties, but because the jobs did not require sufficient educational prerequisites.

"Exempt" compared to "non-exempt"

As a fast refresher: the FLSA (administered by the Department of Labor -- DOL) is the federal law that requires employers to pay overtime compensation to employees who work more than 40 hours in a week. All employees must receive overtime pay unless the employer can prove that the position is exempt from the FLSA. When considering social workers there are three relevant exemptions -- the so-called "white-collar" exemptions -- executive, administrative, and professional. Social workers who supervise two or more employees may fall under the executive exemption, but they would not meet the criteria for the administrative exemption. Thus, if a social worker does not supervise two or more employees, the only other possible exemption for a social worker is "learned professional."

Under the DOL regulations, to be classified as an exempt learned professional the primary duties of the employee must require "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction." The regulations go on to state that the professional exemption is not available for occupations that customarily may be performed with only the general knowledge acquired by an academic degree in any field, with knowledge acquired through experience.

In the Solis case, the State of Washington required that its social workers have:

  • A college degree in "social services, human services, behavioral sciences or allied field," or all three of the following:
  • A degree and 30 semester credits or 45 quarter credits in social services
  • A minimum of 18 months' experience as a social worker
  • Completed additional formal training provided by their employer.

The court held that these educational prerequisites were not sufficient to meet the standard for the professional exemption because they did not amount to "specialized intellectual instruction."

When can social workers be classified as exempt?

So what would it take for a social worker's educational requirement to satisfy the "advanced learning" requirement for the professional exemption? The Solis court looked favorably on the conclusions reached in two DOL opinion letters that found that the following educational requirements met the test:

  • A master's degree in social work, human services, drug and alcohol, education, counseling, psychology, or criminal justice, or
  • A bachelor's degree in human behavioral science which includes 30 semester or 45 quarter hours either in development of human behavior, child development, family intervention techniques, diagnostic measures, or therapeutic techniques, such as social work, psychology, sociology, guidance and counseling, and child development.

Alternatively, requiring a social worker to be licensed by the state, if the licensing procedure requires a specialized course of study, would also be sufficient. What is not sufficient are general degree requirements that can be satisfied with any number of diverse academic majors such as:

  • A bachelor's degree in social sciences
  • A bachelor's degree in human services, behavioral sciences, or an allied field.

Remember: you cannot use years of experience as a social worker alone to meet the professional exemption despite the vast knowledge that a non-degreed social worker may have. Simply stated, an employee cannot be an exempt professional unless the job requires the employee to have previously completed a course of specialized intellectual instruction.

So go through your job descriptions and review the minimum educational qualifications in light of the primary duties of the position to evaluate whether the educational prerequisites are narrowly drafted to evidence specialization for the work that the employee will perform. Be as specific as possible about the number and type of courses that are required if the degree is not directly related to the position (for example, a biology degree for a biologist).

Lastly, don't forget that in addition to the educational requirement to qualify for the learned professional exemption, the employee's primary duty must be the performance of work requiring advanced knowledge, defined as work which is "predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment."

For additional details on the professional exemption see the DOL's fact sheet on the professional exemption here.

On reflection

What is scary about the Solis case is that it was not a lawsuit filed by a group of disgruntled employees, but was an enforcement action filed by the DOL based on the complaint of a single employee . . . and it overturned the overtime exempt status of hundreds of employees in 44 field offices. Undertaking a proactive review of your job descriptions and overtime classifications is a great way to avoid this fate and steer clear of the Obama administration's increased enforcement activities.

If you want to learn more, we are holding a webinar on October 18, 2011, about the ins and outs of the Executive, Professional, and Administrative overtime exemptions. Click here to register.

Ellen Aldridge is an HR attorney at the Nonprofits Insurance Alliance Group. She and her co-author in "Ask Rita" -- Pamela Fyfe -- answer thousands of HR questions free for nonprofits who are insured through NIAC or ANI (NIAG members).

When we asked Ellen if she herself were exempt or nonexempt, she responded: "I am finding that I am not exempt from going on thrill rides at water parks with my children, despite my aversion to heights."

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