Duties Test for White Collar Exemptions from Overtime

The FLSA excuses employers from paying overtime for those employees whose duties meet the regulatory requirements for so-called “white collar” employees: “administrative,” “professional,” “executive,” or “computer programmers.” Often employees are classified as exempt based solely upon job title, job classification, bargaining unit membership or salary. These factors provide a good place to start the FLSA “duties” test analysis; however, they are not legally sufficient in and of themselves. An examination of the employee’s actual job duties is also required.

FLSA “Regular Rate of Pay”

The FLSA “regular rate” of pay is the rate that must be used to calculate FLSA overtime compensation owed. The FLSA regular rate generally includes all items of compensation that compensate employees for skill, effort, or inconveniences, such as bilingual pay and shift differential pay. Many employers fail to include some or all items of compensation that are required to be included in calculating the regular rate of pay. And, some employers fail to calculate FLSA overtime compensation using the regular rate of pay altogether, and instead erroneously use the base hourly rate.

FLSA Work Time

The FLSA requires employers to compensate employees for those periods of time that qualify as FLSA work time. Depending upon the facts of each case, the following may constitute FLSA worktime: sleep time; standby time; meal time; clothes-changing time; and pre- and post-shift briefing time.

Alternative Work Schedules

Many employers offer their employees alternative work schedules, e.g., 9/80, 3/12 or 4/10. Although employees are often eager to receive these schedules, an employer is still liable for “built-in” overtime that these schedules often generate.

Compensatory Time Off

The FLSA allows public employers to substitute compensatory time off (CTO) in lieu of cash overtime compensation if particular requirements are met. Public employers often fail to comply with the FLSA requirements regarding: the need for a prior agreement to substitute CTO for cash overtime; the limits on CTO accrual; the “unduly disruptive” standard; and the use of CTO.

Police Canine Pay

Under the FLSA, all off-duty hours spend caring and maintaining a police canine are work hours that must be compensated. Police agencies often fail to provide correct compensation for this canine “bonding” time.

Training and Travel Time

The FLSA regulations regarding whether travel and training time are compensable work time are intricate. The work time/non-work time determination can change depending upon the particular facts of each case.

Volunteers

The FLSA analysis of whether an individual is a “volunteer” is fact-intensive. Individuals are considered to be volunteers only when their services are offered freely and without the employer’s direct or indirect pressure or coercion. Employers can be on the hook for straight and overtime pay for those who do not qualify as volunteers.

Improper Disciplinary Deductions for “White Collar” Employees

The FLSA requires that white collar employees must be paid on a “salary basis.” Except in certain circumstances, a reduction of a white collar employee’s pay for disciplinary reasons violates the FLSA salary test. If an employer has a policy or practice of making improper suspensions, all of the white collar employees covered by that policy or practice may be entitled to overtime for the entire two-to-three year liability period. This can result in staggering liability for an employer which could exceed one million dollars, depending upon the number of white collar employees.