Exempt Employees

KathyO

We have several new managers in our organization who would like to set up several employees as salaried (ie: exempt). I would like to know if it is allowable under both federal and Florida state law to have our bookkeeper in this group. Also, several secretaries for our sales staff. Do these positions qualify to be exempt? Please let me know. Thank you.

Margaret Morford

Probably not. There are all kinds of expensive pit falls to doing this. You need some expert advice, but my guess is that any expert will say neither of these positions are exempt.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

bsa

I agree with Margaret. The FLSA is mighty complicated and not easily understood by the average everyday manager. You should probably checkout the DOL website for more confusion.... no, I meant clarification didn't I?!

Pork

Contact your friendly regional DOL office and ask them to provide you with a free copy of Regulations Part:541 DEFINING THE TERMS EXECUTIVE, ADMINISTRATIVE, PROFESSIONAL AND OUTSIDE SALES, bulletin. I have had a copy of this document and it is much read and scribble in like my Bible. My peers who come calling for this assistance to make ee's salaried are very empressed when I whip out my Federal Guide book and turn to the ready reference for their question and they are very respectful when I tell them yes, but here is the way that we do that, now are you willing to make sure that we stay within these guidelines to accomplish legally what you want to do. In many cases I have agreed to help them put ee's on salary by using the FIXED SALARY FOR A FLUCTUATING HOURS paragraph of Regulations, Part 778: INTERPRETATIVE BULLETIN ON OVERTIME COMPENSATION, 773.114. What you do is task the manager to give you the total weekly hours worked for any position and you calculate the gross salary including the overtime. As long as the employee works within the total agreed to number of hours, there is no problem with putting that position on salary. Should the employee go over the agreed to number of hours in a weekly pay period then she/he is entitled to the additional income. In the case where the employee works less than the number of hours in a pay period, then efficiency has checked in and the employee collected more than necessary. Don't allow any one to go on this system with out a signed agreement with the manager and the ee. Both must agree to pay for a certain number of hours as a gross pay of $XXX. Both must agree that should the ee work less than the number of hours there will be no adjustment in the gross pay for that week. If after 4 weeks the total number of hours is greater or less than the previously agreed to number, then recalculate and sign a new agreement. As an HR/PAYROLL PERSON YOU ARE BEING SUPPORTIVE OF THE OTHER STAFF AND VERY PROFESSIONAL AT THAT. IT WORKED FOR ME AND I HAVE HAD A FEW BUT NOT MANY WHO CHOSE THE SALARIED BIT.

Theresa Gegen TX

There is no way secretaries are exempt (however, they can be paid a salaried non-exempt, in which case they would still get overtime). On the bookkeeper, it really would take a detailed analysis of the duties in comparison to the regulations to determine whether the position was exempt. Keep in mind that the law is designed so that most positions are NOT EXEMPT!

Good Luck!

Hatchetman

[font size="1" color="#FF0000"]LAST EDITED ON 01-28-03 AT 09:36PM (CST)[/font][p]I agree with Theresa. And I have to disagree with Prk.

If the positions are non-exempt, then pay them on a waged (hourly) basis, not a salaried one.

Don't go through the fluctuating salaried rigamarole. You don't need to.

I assume if the employees positions are non-exempt, they will not work more than 40 hours per week on a regular basis. If your managers are pushing you to make them salaried, non-exempt, which is possible, then use another method of calculation that FLSA provides at 29CFR778.113(a).

As salaried, the weekly salary is divided by the number of hours the employee is intended to work (assuming it's not over 40). That gives you the hourly rate for computing the overtime (over 40 in a week). So, if the employee, as the FLSA regulations note is suppose to work 35 hours then a weekly salary of $350 is divided by 35, or $10 an hour and $15 for each hour of overtime -- (above 40). If and when the employee works more than 40 hours in that week, the overtime hours are then paid at $15 per hour (time and a half of the hourly rate) in addition to the hourly rate for the first 40 hours (remember the employee's slary was only intended for 35 hours so you only half to pay straight time for the additional 5 hours -- $50 -- since time-and-a-half doesn't kick in until 40 plus).

Explain that to your managers. Then tell them that as salaried employees, they aren't to have deductions from their base salary for absences. As salaried, they get a set amount of pay for a fixed period of time without variation. But as non-exempts, they must be paid time-and-a-half for overtime. In essence they get the best of both worlds (exempt and non-exempt -- in fact, better!). An "undocked" salary for the entire week plus time and a half overtime if worked in that week. I'm sure they'll see how costly that is. And just decide to go with non-exempt, hourly.

If the positions turn out to be non-exmept, then make them hourly. If they turn out to be exempt (which I generally doubt), then make them salaried, in accordance with Section 541 of Title 29 of the Code of Federal Regulations and follow that regulation.

Remeber, the determination of "exempt" or "non-exmept" is based uon the duties they perform as described in Section 541 (either as professional or adminsitrative, most likely if applicable.).

System

KathyO -- If you subscribe to Florida Employment Law Letter, you can find a mountain of free FLSA information in the subscribers area of HRhero.com, including an HR Executive Special Report.

James Sokolowski
Senior Editor
M. Lee Smith Publishers