
In addition, it
is important to remember that, even under the current rules, employers can get
burned by misclassifying employees as exempt when they do not meet the
requirements of the "white collar" exemptions. The "white collar" exemptions cover
employees who (1) are paid a salary that exceeds the minimum threshold, and
(2) primarily perform job duties that are executive, administrative, or
professional. With all of the recent focus on the salary threshold,
employers should be careful not to overlook the job duties requirement of the
exemption tests.
The importance
of carefully considering job duties was recently demonstrated by a ruling issued by the U.S. Court of Appeals for
the Eighth Circuit, which has jurisdiction over appeals from cases handled by Minnesota
federal district courts. The case examined the administrative “white
collar” exemption, which provides that the employee's primary duty: (1) must be
the performance of office work directly related to the management or general
business operations of the employer or its customers; and (2) must include the
exercise of discretion and independent judgment with respect to matters of
significance. In discussing the first
factor, the Eighth Circuit Court of Appeals differentiated between exempt work
that was related to the management or general business operations of the
employer—an energy company—and the direct, hands-on, non-exempt work of the production
and distribution of energy. Ultimately, the Court found that the question
of whether the plaintiff did exempt work was too close to decide at the summary
judgment stage and must be decided by the jury.
This case serves as an important reminder that employers must carefully examine an employee's job duties when considering whether to classify the employee as exempt from the wage and hour laws. Don't get burned; as you await the final salary threshold rule from the DOL, you should prepare for the change by evaluating both the salary threshold and job duties of your employees currently classified as exempt.
This case serves as an important reminder that employers must carefully examine an employee's job duties when considering whether to classify the employee as exempt from the wage and hour laws. Don't get burned; as you await the final salary threshold rule from the DOL, you should prepare for the change by evaluating both the salary threshold and job duties of your employees currently classified as exempt.
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