Your Secretary / Admin Assistant May Be Eligible for Overtime in Business and at Work
I was privileged to moderate a distinguished panel of United States Department of Labor representatives and great local employer-side labor lawyers last week on the upcoming minimum exempt salary level change to $913 a week effective December 1, 2016. While the minimum salary level for highly-compensated exempt employees is also rising from $100,000 to $134,004 on December 1st, nothing else is fundamentally changing with regard to the Federal Fair Labor Standards Act (FLSA).
As with every presentation I have participated in and presented, everyone on the panel emphasized to the employer audience present that the December 1st change is the perfect opportunity to ensure that the FLSA status of every employee is properly (and compliantly) assigned.
We spent a good chunk of time on the FLSA Administrative Exemption, as many employers assume that if an employee works in an office and carries the title of Administrator, that those factors alone fulfill Administrative Exemption requirements. Unfortunately, that is not correct.
Below are the factors necessary to meet the Administrative Exemption:
- Must be paid at least $455 weekly ($913/week effective December 1, 2016) on a salaried basis.
- Primary duty consists of performing office or non-manual work directly related to the management or general business operations of the company.
- Work includes the exercise of discretion and independent judgment with respect to matters of significance.
- Examples: manager, supervisor, administrator.
It is the 3rd bullet above (aside from the minimum salary level defined in the 1st bullet above) that makes or breaks the Administrative Exemption. As explained in more detail on the U.S. DOL website:
Discretion and independent judgment with respect to matters of significance
The phrase “discretion and independent judgment” must be applied in the light of all the facts involved in the particular situation in which the question arises. Factors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to:
- whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices;
- whether the employee carries out major assignments in conducting the operations of the business;
- whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business;
- whether the employee has authority to commit the employer in matters that have significant financial impact;
- whether the employee has authority to waive or deviate from established policies and procedures without prior approval;
- whether the employee has authority to negotiate and bind the company on significant matters;
- whether the employee provides consultation or expert advice to management;
- whether the employee is involved in planning long- or short-term business objectives;
- whether the employee investigates and resolves matters of significance on behalf of management; and
- whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.
An employee does not exercise discretion and independent judgment with respect to matters of significance merely because the employer will experience financial losses if the employee fails to perform the job properly.
In general, 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. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.
And as we clarified during last week’s panel: giving your organization’s Secretary / Administrative Assistant responsibility for organizing the annual Holiday Party does not constitute discretion and independent judgment with respect to matters of significance; and unless your organization’s Secretary / Admin Assistant regularly / customarily exercises discretion and independent judgment with respect to matters of significance, in all likelihood, your Secretary / Administrative Assistant is nonexempt and eligible for overtime in business and at work.