Determining status under new regs

HR in Okla

We are a retirement center and have a Volunteer/Activities Coordinator. She recruits and trains volunteers, coordinates all kinds of events and activities. She used to supervise the front desk staff also and qualified as exempt.

She is salaried at a high enough level, but now that she isn't a supervisor, I'm having trouble justifying the exemption. She uses plenty of discretion and independent judgement, it's that line about "directly related to management or general business operations" that concerns me. All the examples of the administrative exemption on the DOL website are things like accounting, and HR.

Our exempt people accrue more vacation than non-exempt, so no one wants to lose the exemption.

any suggestions??

Hatchetman

[font size="1" color="#FF0000"]LAST EDITED ON 05-21-04 AT 12:49PM (CST)[/font][br][br]Baed upon what you posted, her duties don't constitute those related to "management or general business operations."

Her duties are restricted in scope and are not applicable to the entire company. She is limited to dealing with volunteers by hiring and training them and that's how her discretion and independent judgement is used -- limited to a particular aspect of the company that at impacts only that aspect of the company.

Just my opinion.

AJ SPHR

Based on information I found in the DOL's Administrative Exemption presentation, I believe your person could be exempt:
""The phrase "management or general business operations"
refers to the type of work the employee performs. To meet
this requirement, the employee must perform work that is
directly related to assisting with the running or servicing of
the business. This type of work is different, for example,
from working on a manufacturing production line or selling
a product in a retail or service establishment. Work
"directly related to management or general business
operations" includes, but is not limited to, work in such
areas as tax; finance; accounting; budgeting; auditing;
insurance; quality control; purchasing; advertising;
marketing; research; safety and health; human resources;
public relations; legal and regulatory compliance; and
similar activities."

I don't believe the person has to be working on something that impacts the entire business operations in order for that employee to be exempt. Recruiting and training volunteers seems to me to be important to supporting the retirement center, as does coordinating events and activities. If she is using discretion and exercising judgement on her own, with minimal supervision or direction, why not exempt?

Hatchetman

If she were involved in training in general or part of the training unit I would agree that she could meet the exempt. But she seems to be limited to just ONLY training one part of a specialized area and be involved in a specialized aspect that is limited to one area -- volunteers.

One could always say that in a service industry "non-line" jobs are somehow related to the the management or general business operations of a company, but it seems to me the regs do require more than just not doing line work in a service industry.

HR in Okla

Thanks for the opinions. I'll see what other insights she has to add to the discussion.

crawfod

Now this represents an interesting twist on FLSA issues. The normal concern of Exempt vs Non-exempt deals with eligibility for overtime compensation, so on that issue I would suggest you analyze the possibility that someday she argues that you deprived her of OT pay by clasifying her as Exempt. If she doesn't work any OT, then usually it is not a problem to leave her Exempt.

In your case, it sounds like the favored classification for your employees is Exempt, because of your higher vacation accrual. (As a side note, I'd be interested in knowing what the accrual rate difference is, and how you justify that different benefit treatment for your entire workforce.) Therefore, it would seem one potential problem will be if you classify this employee as Exempt, how many other employees with similar duties will be asking to also be classified as Exempt. Are you comfortable that their duties are clearly not eligible for Exempt status, or would you be vulnerable to a lawsuit for treating her different?

My general personal theory is if I have to really study the guidelines to make someone Exempt, then I am probably better off making them Non-exempt and trying to control excessive overtime expenses some other way. I'd rather pay OT pay than deal with legal expenses defending my classification.

In your case, the motivation is apparently not OT pay but higher vacation accrual benefits; thus the desired classificaiton is Exempt instead of the usual Non-exempt. Your employee has been Exempt before and probably will not like being changed. If I knew OT was not an issue, and no other employee can argue, "If her duties make her exempt, then so do mine.", then I'd leave her Exempt. Like I said, Verrrry interesting twist!

HR in Okla

Thanks, she is paid salaried at well over the $455/week and rarely, if ever, would work over 40 hours a week.

This higher accrual rate for exempt has been in place far longer than I have. We justify it by saying they don't get overtime pay and most have to work well over 40 hours to get their jobs done.

I have pared down the number of exempt to those who qualify without doubt. She has been the last one I was unsure about. My take on her duties is like Hatchetman, that her function does not really fall under general business operation.

The big deal in our organization for wanting to be exempt is not having to punch the clock. That seems to be a status issue for a lot of people.

crawfod

If you'll indulge me a little further on the side issue of vacation accrual, I'm curious how many extra accrual hours/days does an Exempt employee get per year? What if you have Exempt employees who either rarely need to work more than 40 hours or who leave at quitting time no matter what their workload is? I would think some would resent a co-worker who is getting the same accrual rate and not having to do the extra work that the benefit was created for.

HR in Okla

The accrual structure varies with seniority, but basically most exempt employees gets one week a year more than non-exempt with same seniority. We don't have that many exempt and most put in plenty of hours. I've not had anyone complain about it in 5 years I've been here.

I questioned this when I first started along with offering LTD only to exempt. The attorneys have assured me that it is legal. You can treat different classifications differently for some purposes as long as everyone in that class is treated the same.

Mentel

Go to [url]www.dol.gov/fairpay[/url]. This has great information on the definitions of executive, administrative and professional employees. Also, you can email your specific question to DOL at [email]fairpay@dol.gov[/email]. I also have positions that are in the grey area of professional and I am waiting for their response.

HR in Okla

Thanks, I agree the website info is excellent. I have printed all of it for reference. It's just this one job that didn't fit neatly into any class.