HR Management & Compliance

Watch Out for Exemption Misclassifications in California

It’s important to be sure you properly classify jobs as exempt if you’re asserting an exemption to the overtime pay requirements of the federal Fair Labor Standards Act (FLSA). That message was reinforced by a recent decision of the Ninth Circuit Court of Appeals (which includes California) in which the court concluded that state social workers may not meet the requirements for an FLSA exemption.

Social Workers Traditionally Treated as Exempt ‘Learned Professionals’

The Washington State Department of Social and Health Services (DSHS) employs social workers at several levels in its Children’s Administration, which has the mission of protecting abused and neglected children.

DSHS historically has treated its Social Worker 2 and Social Worker 3 employees as exempt “learned professionals” not subject to FLSA overtime requirements. According to the agency, the classification was based on its “rigorous educational qualifications” for the jobs.

Specific Education, Experience Requirements

Candidates for Social Worker 2 positions must have at least a “bachelor’s degree or higher in social services, human services, behavioral sciences, or an allied field” plus 18 months as a Social Worker 1 or two years’ equivalent experience.

Candidates for Social Worker 3 positions must meet the same educational requirements and have additional work experience. Plus, all new social workers must complete a formal training program consisting of four weeks of classroom instruction and two weeks of field instruction.


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Employee Complaint Triggers DOL Investigation

The U.S. Department of Labor (DOL) investigated the social worker classifications after receiving a complaint from a DSHS employee. The investigation concluded that Social Worker 2 and 3 positions didn’t meet the requirements for the “learned professional” exemption under the FLSA. Ultimately, the DOL filed a lawsuit against DSHS seeking overtime pay for the social workers it claimed had been improperly classified.

The trial court ruled in favor of DSHS, holding that the positions in question satisfied FLSA requirements. The DOL appealed that ruling.

Specialized Intellectual Instruction Requirement Not Met 

The FLSA requires you to pay workers at least the minimum hourly wage and one and a half times their regular hourly rate for hours worked over 40 in the workweek.

Certain job classifications aren’t subject to overtime pay if they satisfy the requirements for one of the so-called “white-collar exemptions” spelled out in the FLSA. One such exemption is for learned professionals.

In considering the DOL’s appeal, the Ninth Circuit observed that FLSA exemptions are to be interpreted narrowly and limited to jobs that clearly satisfy every requirement for an exemption.

To qualify as exempt, a learned professional must primarily perform work “requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.” Most often, that means the learned professional must have a specific academic degree, not simply the general knowledge acquired through a degree in any field, an apprenticeship, or training in routine tasks. Specialized intellectual instruction is critical to establishing that a job meets the exemption.

DSHS argued that its education requirements for Social Worker 2 and 3 positions met the criteria for learned professionals. On closer examination, the court disagreed.

Why? Tune in tomorrow for the conclusion of the case—as well as a comprehensive desk resource, specifically for California employers, that helps you avoid costly misclassification missteps.

Download your free copy of Paying Overtime: 10 Key Exemption Concepts today!

4 thoughts on “Watch Out for Exemption Misclassifications in California”

  1. And, of course, once we get into the new year, we have to worry about the new California law on misclassification. The penalty for misclassifications that are “willfull” (whatever that is) is pretty high.

  2. And, of course, once we get into the new year, we have to worry about the new California law on misclassification. The penalty for misclassifications that are “willfull” (whatever that is) is pretty high.

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