Human Resource Blog

Exempt and non-exempt rules

The more I read about the guidelines for Exempt and Non-Exempt employees, the more confused I become.

Below, I have listed several employees. Can you tell me how they SHOULD be categorized and if the contract days and time off is appropriate?

We have the following as Exempt employees. All are on 235 day contracts and are paid over the minimum limit to be eligible for Exempt status. All have a certain number of contracted days. Days of the year not included in their number of contracted days are time off for vacation. All have 10 sick leave days and 2 personal leave days. They are allowed to take days in increments of 1/4 of a day.

Finance Coordinator: Comes in at 6:00 am or so (her choice) and sometime comes in on a Saturday (her choice).

Technology Director: Works pretty much 8-5, but is on call in emergencies.

Graphic design/Webmaster: Works pretty much 8-5, but sometimes likes to work on the website from home during these hours or beyond.

HR Coordinator: Works pretty much 8-5, sometimes works these hours from home.

Secretary: Works 8-5 or less.

Head custodian: Works his own hours on his schedule. 40 hours per week or less.

Head of maintenance: Works his own hours, but usually 40 hours per week.

Thank you for helping clear this up.

Under the federal FLSA, exempt status depends upon an employee's primary job duties– the duties the employee actually performs most days. It does not depend upon their title, hours worked, job description or benefits.

For example, many times a retail store manager who hires and fires employees, sets prices and buys products is an exempt employee. However, in one recent case, a federal court found that a Dollar General Store manager was not exempt because she spent the majority of her time working the cash register and stocking shelves — not engaged in management activities. In addition, she did not have authority to make decisions that would affect the viability of the business.

There is nothing wrong with the work hours and time off you have posted — but nor do they have any bearing at all on exempt or non-exempt status.

Merely allowing an employee to come and go as he pleases, or work a schedule of his choice, does not make the employee exempt. In fact, it has absolutely no bearing on whether the employee is exempt or not. Many exempt employees must work a rigid schedule,and apparently at your organization even the custodian works a schedule of his choice.

Giving the employee the title of “manager” or “head custodian” does not automatically make that employee exempt. Neither does paying him a salary instead of on an hourly basis.

The secretary, human resource coordinator, head custodian and head of maintenance are probably non-exempt employees. Exception: if one of them supervises 2 other full-time employees, with the authority to hire and fire those employees, then he or she may be an exempt “Executive.” However, the normal job duties of these positions do not meet the requirements for exempt status.

In particular, an employee who mostly works with his hands is never exempt. So for example, a plumber or carpenter can never be exempt — and it is very rare for a custodian or head of maintenance to be exempt.

In the past many secretaries and HR coordinators were treated as exempt. However, in the past 2 years the federal courts have ruled that to be exempt, an Administrator must have the authority to make decisions that affect the viability of the business. This pretty much rules out all secretaries. It will also rule out the HR coordinator unless she has significant authority to hire and fire employees, and to determine what they will be paid, without consulting guidelines or another manager.

Sorry, but there is not really enough information to answer your questions on the other jobs. An employee who spent 95% of his time on graphic design would be an exempt creative professional. An employee who spent 10% of his time on graphic design and the rest maintaining a website would probably be non-exempt. But he might be an exempt Computer Professional if he spends most of his time writing HTML code. See the problem?

The Finance Coordinator and Technology Director might be exempt based upon primary job duties, if they supervise 2 or more full-time employees or have the power to make decisions that could bankrupt the company. If not, then they would be non-exempt, and the Finance Coordinator would be entiteld to overtime because she is working more than 40 hours per week. A non-exempt employee who works more than 40 hours per week is entiteld to overtime, even when she sets her own hours.

Check the questions from yesterday, March 17 — there is a lot of information on exempt and non-exempt status.

The issue of which employees are exempt is complex. Feel free to post more questions giving information on job duties, and we will try to clarify for you. It would also be helpful if you would explain why you believe these employees to be exempt.