One way for an employer to defeat an employee’s unpaid overtime claim is to establish that the worker was exempt from those provisions in the Fair Labor Standards Act. The law has several types of FLSA exemptions, including the executive exemption, the administrative exemption, the professional exemption, the computer employee exemption, the outside sales exemption, and the highly compensated employee exemption, among others. Whether you are an employee or an employer, understanding the scope of these exemptions, and when they do (or don’t) apply can be crucial. An experienced Atlanta wage-and-hour lawyer can provide much-needed advice and information about these exemptions.
A recent case from the Middle District of Georgia looked at one exemption in particular – the administrative exemption.
According to the employees’ lawsuit, their employer illegally failed to pay them overtime compensation in violation of the FLSA. The employer contended that it did not owe the women overtime pay because the administrative exemption applied.
As an employer, establishing that the administrative exemption applies requires several things. One, you have to prove:
- The worker did, as her primary duty, “office or nonmanual work directly related to the management or general business operations of the employer or the employer’s customers.”
- The worker’s tasks required “the exercise of discretion and independent judgment with respect to matters of significance.”
- The worker received a salary of at least $684 per week. (A number that, as of July 1, 2024, will climb to $844 per week following the Labor Department’s promulgation of a new salary threshold rule.)
The Power to Make an Independent Choice
As with many cases, this employer’s administrative exemption argument centered largely around the second prong — the exercise of discretion and independent judgment. The Labor Department’s regulations have expressly stated that the “exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.” Basically if a worker is empowered to make decisions on her own without requiring “immediate direction or supervision,” that’s discretion and independent judgment.
That authority need not be final authority, however. As the court reminded readers, “Employees may still exercise discretion and independent judgment if their decisions and recommendations are reviewed at a higher level.”
The employer provided several areas where W.D., the worker who held the role of office manager, allegedly exercised discretion and independent judgment. According to the employer, she “monitored and transferred money between bank accounts,” screened potential employees, and did worker performance evaluations. She allegedly had three subordinates beneath her and expressed opinions about those workers’ entitlement to raises in pay.
The second worker, who held the role of “deployment specialist,” allegedly reviewed patients’ medical results and decided whether or not they were deployable based on those results. According to the employer, she also interviewed potential new employees and helped locate workers in new markets.
That, according to the judge, was ample proof to raise an arguable claim of discretion and independent judgment and defeat the workers’ motion for summary judgment on the exemption issue.
As an employer, misclassifying an employee as exempt instead of non-exempt can have serious negative ramifications, including potential FLSA liability. As a worker, this kind of error can deny you pay that the law says you should have received. Whether you’re an employer or an employee, the experienced Atlanta wage-and-hour attorneys at the law firm of Parks, Chesin & Walbert can provide you with vital knowledge and advice about the FLSA exemptions and exempt-versus-non-exempt classifications. Get started today by contacting us at 404-873-8048 or through this website to schedule a consultation.