Wal-Mart is poised to defend against a wage-related suit that could have as many as 1.5 million class members. Your suit won’t be as big, but do you think it’s a good reminder to review your exempt/nonexempt classifications?
Here, from BLR’s experts, are explanations of many of the trickiest classification questions:
Executive Secretary
An executive assistant to a business owner or senior executive of a large business may qualify as exempt if the employee, without specific instructions or prescribed procedures, has been delegated authority regarding matters of significance. Administrative assistants are otherwise usually nonexempt.
Chefs
Chefs, such as executive chefs and sous chefs who have attained a 4-year specialized academic degree in a culinary arts program, may be exempt, while cooks who perform predominantly routine mental, manual, mechanical, or physical work would still be nonexempt.
Insurance Claims Adjusters
Insurance claims adjusters who interview insured individuals, witnesses, and physicians; inspect property damage; review factual information to prepare damage estimates; evaluate and make recommendations regarding coverage of claims; determine the liability and total value of a claim; negotiate settlements; and make recommendations regarding litigation may be exempt.
HR People
The regulations state that Human Resources managers who formulate, interpret, or implement employment policies are exempt administrative employees. Lower-level HR personnel would likely be nonexempt.
Paralegals
Paralegals and legal assistants are generally nonexempt because an advanced specialized academic degree is not a standard prerequisite for entry into the field. Lawyers, on the other hand, are exempt professionals.
Social Services Employees
DOL has stated in an opinion letter that social workers with master’s degrees who work in the field of their degree may meet the requirements of the learned professional exemption if they are performing that work at a level that requires advanced knowledge in a field of science or learning and has the recognized professional status required by the FLSA regulations.
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Registered Nurses
FLSA regulations make a distinction between registered nurses and licensed practical nurses. Registered nurses may qualify as exempt; however, many are paid hourly as nonexempts. Licensed practical nurses are usually nonexempt because the possession of the specialized advanced academic degree is not a standard prerequisite for entry into the occupation.
Managers in Training
The executive, administrative, professional, outside sales, and computer employee exemptions do not apply to employees training for employment in those exempt positions if they are not actually yet performing exempt duties. Until they are performing exempt duties, they will be considered nonexempt employees.
Buyers
A buyer can be an exempt administrative employee as long as the buyer’s work involves substantial discretion and independent judgment. For example, someone who has authority to go out and commit the company to the purchase of a substantial dollar amount of raw materials may be exempt.
Conversely, if buyers’ dollar authority is limited to $100 to buy office supplies, the level of authority or discretion they have is too insignificant to warrant the administrative exemption.
In addition, buyers who simply evaluate reports on competitor prices to set their employer’s prices would be nonexempt, as would comparison shoppers for a retail store who merely report to the buyer the prices at a competitor’s store.
Unfortunately, expensive wage and hour mistakes are all too common, and there’s a throng of lawyers waiting to take you on when you make them. What’s your best defense? An HR audit is really the only way to dig down, see what’s happening, and get it fixed. But for most HR managers, it’s hard to get started auditing—where do you begin?
To get your audits going, BLR’s editors recommend a unique product called HR Audit Checklists. Why are checklists so great? Because they’re completely impersonal, and they force you to jump through all the necessary hoops, one by one. They also ensure consistency in how operations are conducted. That’s vital in HR, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.
HR Audit Checklists compels thoroughness. For example, it contains checklists both on Preventing Sexual Harassment and on Handling Sexual Harassment Complaints. You’d likely never think of all the possible trouble areas without a checklist; but with it, just scan down the list and instantly see where you might get tripped up.
Find problems before the feds do. HR Audit Checklists ensures that you have a chance to fix problems before government agents or employees’ attorneys get a chance. Try the program at no cost or risk.
In fact, housed in the HR Audit Checklists binder are dozens of extensive lists, organized into reproducible packets, for easy distribution to line managers and supervisors. There’s a separate packet for each of the following areas:
- Staffing and training (incorporating Equal Employment Opportunity in recruiting and hiring, including immigration issues)
- HR administration (including communications, handbook content, and recordkeeping)
- Health and safety (including OSHA responsibilities)
- Benefits and leave (including health-cost containment, COBRA, FMLA, workers’ compensation, and several areas of leave)
- Compensation (payroll and the Fair Labor Standards Act)
- Performance and termination (appraisals, discipline, and termination)
HR Audit Checklists is available to HR Daily Advisor® readers for a no-cost, no-risk evaluation in your office for up to 30 days. Visit HR Audit Checklists, and we’ll be happy to arrange it.