CSSA Magazine Article- FLSA – Who is Exempt?


January, 2006

By:  Martin J. Mayer

Not too long ago, the Federal Department of Labor modified Part 541 of the Code of Federal Regulations (CFR) regarding exemptions from the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). Questions have arisen, as a result of those modifications, as to how an employer determines whether an employee is exempt? Is it based upon his or her job title alone, or must other criteria be considered?

Executive Employees

The changes which were made to 29 C.F.R. Part 541 were done in order to clarify which employees were working in a “bonafide executive capacity” for purposes of the exemption. The regulations defining which employees are considered exempt are contained in 29 C.F.R. § 541.100. That section states that, for purposes of determining the exemption, the employee must fall into all four of the criteria set forth in § 541.100(a).  The criteria consist of the following:

  1. Compensation must be on a salary basis at a rate of not less than $455.00 per week, exclusive of board, lodging, or other facilities;
  2. The employee’s primary duty must be management of the enterprise in which the employee is employed, or of a customarily recognized department or sub-division thereof;
  3. The employee must customarily and regularly direct the work of two or more employees; and
  4. The employee must have the authority to hire or fire other employees or his or her suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change in status of other employees is given particular weight.

It is noted in 29 C.F.R. § 541.2 that job titles alone are “insufficient to establish the exempt status of an employee” and, furthermore, the exempt status of any particular employee is determined by “whether the employee’s salary and duties meet the requirements of the regulation.” Section 13(a)(1) of the FLSA provides an exemption from the minimum wage and overtime provisions if an employee is employed in a bonafide executive, administrative or professional capacity. Again, merely calling the individual an executive, administrator or manager will not, in and of itself, be sufficient to justify the exemption.

Primary Duties

To meet the requirements of § 541.100(a)(2), as set forth above, depends on whether the employee’s “primary duty” is management of the entity or subdivision. The term “primary duty” is defined in § 541.700(a) as the “principal, main, major or most important duty that the employee performed.” In order to determine what an employee’s primary duty consists of, one must look at “the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employees relative freedom from direct supervision; and the relationship between the employee’s salary and the relationship between the employee’s salary and the wages paid to other employees for the kind of non-exempt work performed by the employee.” 29 C.F.R. § 541.700(a). Normally, if an employee spends more than 50% of his or her time performing exempt work, that will generally satisfy the primary duty requirement of 29 C.F.R. § 541.700(b).

Management duties include, but are not limited to, selecting and training other employee’s; setting work schedules; directing the work of others; evaluating worker productivity; handling complaints and grievances; disciplining employees; determining techniques, materials, and equipment to be used by employees; and determining supplies, equipment and tools to be purchased.

As to the requirement as set forth in § 541.100(a)(4), as set forth above, regarding whether an employee’s suggestions and recommendations regarding the hiring, firing, advancement or promotion of another employee are, in fact, given “particular weight,” it must be determined whether it is part of the employee’s job to make such recommendations, the frequency with which such recommendations are made or requested, and the frequency with which those recommendations are relied upon. The fact that another employee has the authority to make the ultimate decision, and that another manager’s recommendation may be given more importance, does not diminish the fact that an employee’s recommendations are, in fact, given “particular weight.”

Public Safety Personnel

When Part 541 of the regulations were revised in August 2004, they stated that “the section 13(a)(1) exemption does not apply to police officers, firefighters or other first responder employees who perform work such as extinguishing fires, rescuing crime or accident victims, performing surveillance, pursuing or restraining suspects, interviewing witnesses, or other similar work identified in the regulation because their primary duty is not management or directly related to the management or general business operations of the employer.” As such, those personnel do not qualify for exemptions as an executive or administrative employee regardless of what their title might be.

Nonetheless, section 13(a)(1) exemptions may apply to police lieutenants, police  captains, fire battalion chiefs, etc., so long as those employees meet all the requirements set forth in the regulations. As such, before the employer makes a determination that any member of the organization is exempt from the minimum wage and overtime provisions of the FLSA, a careful analysis must be made of the employee’s salary, primary duties, and actual time spent performing exempt work, in order to avoid liability under the Fair Labor Standards Act.

Penalties For Mistakes

It is imperative to remember that FLSA has “liquidated damages” set forth therein. If the employer violates the FLSA, even in good faith, the liquidated damages provision will require, at a minimum, double the amount of money which otherwise should have been paid to the employee. A knowing violation of the FLSA by an employer, will cause the imposition of a penalty of at least triple the amount that was otherwise owed to the employee. As such, we urge that any time an issue arises regarding the application of, or interpretation of, the Fair Labor Standards Act, that the employer seek the advice and guidance of legal counsel familiar with the intricacies of the FLSA.

Martin J. Mayer serves as General Counsel for the California State Sheriffs’ Association. The Law Offices of Jones & Mayer located in Fullerton, California focus its practice on representing the interests of public entities as its City Attorney, in labor negotiations, in defending tort litigation and civil rights litigation.