• Computer Techs and Programmers
• Office Workers
• Independant Contractors
• Mortgage Brokers and Loan Officers
• Police Officers
• Firefighters, Paramedics and EMS Employees
Computer workers may be exempt under any of the "white collar exemptions," as bona fide executive, administrative or professional employees. There are, however, some peculiarities in how these exemptions have been applied to computer employees, and some special rules which apply to "computer professionals."
A "rule of thumb:" While job titles are often misleading, the white collar exemptions for computer employees are typically limited to "programmers" and "systems analysts."
Computer employees as exempt executives
Computer employees may be exempt executives if they are
1. paid on a salary basis
2. and their duties are exempt executive duties.
The "regular" duties tests for executive employees may apply to employees who happen to work in the computer industry. Thus, employees' duties will be exempt if they regularly supervises two or more employees and their primary duties are "management" as defined in the Regulations. See, e.g., 29 CFR €541.102.
However, the Regulations provide that a computer employee who "directs the day-to-day activities of a single group of programmers and who performs the more complex or responsible jobs in programming will be considered to have management as his primary duty." 29 CFR €541.103. This regulatory language implies an "alternative" for computer employees to the traditional duties tests for executive employees. The regular duties test for executives requires that an employee be "in charge" of the enterprise or a recognized subunit of an enterprise, and perform typical management duties. The specific computer employee Regulation requires only that a computer employee supervise a particular type of employee (programmers) and actually "do" high level programming work.
Computer employees as exempt administrators
As applied to computer employees, "systems analysts" and "programmers" perform work directly related to management policies or general business operations when they "are concerned with the planning, scheduling, and coordination of activities which are required to develop systems for processing data to obtain solutions to complex business, scientific, or engineering problems" of the employer or the employer's customers. 29 CFR €541.205(c)(7).
The Regulations provide that a "systems analyst" [and also, presumably, a "programmer"] exercises discretion and independent judgment when s/he "develops methods to process, for example, accounting, inventory, sales, and other business information by using electronic computers," or when s/he "determines the exact nature of the data processing problem, and structures the problem in a logical manner so that a system to solve the problem and obtain the desired results can be developed," and when s/he "determines exactly what information must be used to prepare the necessary documents and by ascertaining the exact form in which the information is to be presented." 29 CFR €541.207(c)(7).
The following types of computer jobs will not
There is considerable ambiguity and confusion about the application of the administrative exemption to computer employees. Computer employees as exempt professionals. Virtually no computer employees satisfy the traditional duties tests for exempt professionals. However, there are special rules permitting some high level computer employees to be treated as professionally exempt even when they do not meet the traditional duties tests for professional employees, and also when they are not paid on a salary basis.
Computer employees as exempt professionals
These computer professional duties are meant to refer only to highly-skilled employees who "have achieved a level of proficiency in the theoretical and practical application of a body of highly-specialized knowledge in computer systems analysis, programming, and software engineering ... which allows them to work independently and generally without close supervision." As a practical matter, the computer professional exemption is restricted to (real) "systems analysts" and "programmers." The computer professional exemption does not apply to "employees engaged in the operation of computers or in the manufacture, repair or maintenance of computer hardware and related equipment."
Computer employees whose duties qualify them for the professional exemption may be exempt if they are either paid on a salary basis or paid hourly at a rate not less than $27.63 per hour.
FLSA lawsuits involving office workers have typically involved "off the clock" work and employers mistakenly classifying employees as exempt from the FLSA overtime rules.
Most clerical workers are "nonexempt," which means they are entitled to overtime pay if and when they actually work more than 40 hours in a work week.
Sometimes clerical employees perform job-related activities which are not identified, captured or compensated by employers. Examples include working through lunch, staying late to finish a project, running a job-related errand on the way home, or actually doing work at home. The FLSA requires employers to count all time actually worked by employees when computing pay due. Any off the clock work time must be added to all on the clock work time. If the total time actually worked in a work week exceeds 40 hours, FLSA overtime pay is due.
Sometimes employers classify office employees as exempt, who are really nonexempt. This can happen when an employee holds a fancy job title but really performs clerical tasks, such as when a secretary is called an "administrative assistant" or a computer troubleshooter is called a "systems analyst." It can also happen when an employer pays an employee a salary rather than an hourly wage. Merely paying an employee on a salary basis does not make an employee exempt from the FLSA overtime rules. To be exempt, an employee must not only be paid on a salary basis but must also perform exempt job duties.
Employers often attempt to avoid the payment of overtime by classifying their workers as "independent contractors." Under the FLSA, a person who is a true independent contractor is not entitled to overtime pay from the company that hires the person under contract. An employer is required to pay overtime for only its "employees." When courts look at whether or not a person is an independent contractor or an employee, they attempt to analyze the "economic realities" of the relationship. In other words, they attempt to figure out the nature of the relationship based on the actual facts and not based on what the parties call the arrangement. While different courts use different factors to analyze the relationship, the following factors are representative of the things courts examine in the independent contractor analysis:
- The degree of control exercised by the alleged employer;
- The extent of the relative investments of worker and alleged employer;
- The degree to which the workers' opportunity for profit and loss is determined by the employer;
- The skill and initiative required in performing the job;
- The permanency of the relationship; and
- The extent to which the worker's services are integral to the entity.
Depending on your location, courts vary in how they assess these factors. Some courts are more likely that others to find a person is an employee rather than an independent contractor.
One category of people who seem to be called independent contractors where that designation is questionable is the temporary employee or "Temp" (like from Manpower or Kelly). Temps can be regularly assigned to a company where they are expected to work 40 or more hours in a week. Unless the workers under such plans are truly "independent contractors" (and this is relatively rare under the law), they are employees, either of the "employee leasing" company, or the "recipient company," or both. It is common for such individuals to fall through the cracks because no one is necessarily watching out for hour many hours someone is working or how that person is classified. However, as "employees," these folks are entitled to overtime pay if and when they actually work more than 40 hours in a work week.
According to the Department of Labor (in an opinion letter), Mortgage Brokers are supposed to be classified as nonexempt employees who are entitled to overtime. In the Department of Labor determination, the Mortgage Brokers performed the following duties that the DOL found did NOT qualify the brokers as exempt:
Develop new business for the employer by contacting prospective borrowers and referral sources; evaluate the borrowers' financial situation and provide a "prequalification letter" that is used by the borrower, real estate agents, and potential sellers in negotiating the sale; consult with borrowers to obtain the best loan package available (e.g. best interest rates, lowest points and fees, maximum affordable loan amount); work with approximately ten different lenders in selecting loan programs for borrowers; consult with the borrowers regarding the desirability of "locking- in" a given interest rate; assist the borrowers in preparing a loan application for a selected loan program; present and obtain signature of the borrower on disclosures required by federal and state laws; submit loan application to the central office for processing; and consult with loan processors or the borrowers in resolving problems or in obtaining additional information regarding the loan package.
These particular brokers were also subject to very little supervision.
Courts interpreting the administrative exemption have also found that mortgage loan officers should be classified as nonexempt. If you are a mortgage loan officer (or any other loan officer for that matter) and you are not getting paid for overtime, then you may be entitled to unpaid wages and liquidated damages.
Police FLSA overtime claims have resulted in recoveries for K-9 Officers, Detectives and Investigators, "Special Services" Officers, Rank and File Officers, and (in some cases) Command Officers.
The most common police FLSA overtime claims involve "off-the-clock" work. The following activities may be compensable when performed during "off-the-clock" time: Care and maintenance of police equipment (e.g., police dogs, vehicles, guns, uniforms), work performed before or after regular shifts, police-related paperwork and telephone calls, working through meal periods, training time (to the extent such hours are not included in regular pay).
Other police FLSA overtime cases have involved employers' computing FLSA overtime rates improperly by not factoring in "wage augments" such as longevity pay or shift differentials, or when employers have improperly classified officers as exempt employees.
Liquidated damages and attorneys' fees are available to police officers under the FLSA.
Some "Special Rules" for Police
Police K-9 handlers have recovered substantial FLSA overtime for off-the-clock time spent feeding, exercising, training, grooming, and cleaning up after police dogs. (Similar considerations may apply to other police "special services" officers.)
A police K9 handler's FLSA pay is supposed to be calculated based on all the time spent performing K9 activities which are reasonably related to maintain the police dog for the job. This may vary from handler to handler, dog to dog, and job to job. There is no "industry standard" recognized by the law. Some Departments use a "stipend" or other system to compensate K9 handlers. To comply with the FLSA, a stipend should be "hours based" (and not merely a percentage of wages), and the amount should be based on a reasonable estimate of the actual amount of time spent. Historically, many stipends do not comply with the Act.
Each K9 handler's circumstances will vary. Evaluation of individual situations is required to determine whether a handler is being paid properly. In addition, it is impossible to predict how much money any particular handler's FLSA lawsuit might be worth with any degree of accuracy, except on an individual basis. The number of hours worked will vary from handler to handler. The number of hours worked which are compensable will also vary, depending on the handler's work records and schedules, and not all compensable hours worked will be overtime hours. The "arithmetic" necessary to compute a handler's potential recovery can be somewhat peculiar under the FLSA. Nonetheless, many K9 handlers have recovered quite substantial sums as a result of FLSA cases.
Detectives and Investigators
Most police detectives and investigators are "nonexempt" and therefore eligible for overtime under the FLSA. Detectives and Investigators may perform "off-the-clock" work including job-related telephone calls at home (e.g., with informants, prosecutors or other officers), police paperwork at home, going to meetings, work performed before and after regular shifts (e.g., "roll calls," or finishing up reports without "putting in" for overtime), working through meal periods.
Occasionally some police command officers (sergeant and above) may be mistakenly classified as overtime "exempt." Some police command officers are "subject to" suspensions without pay for disciplinary violations, or are paid some form of "overtime" based on the hours they work. Either may raise a question about FLSA exempt status under the "salary basis test." Additionally, merely because officers have "rank" does not necessarily mean that they are FLSA overtime exempt under the "duties test."
The "7(k) Exemption"
Police employers may establish "alternative work periods" for police officers. If properly set up, these may increase the FLSA overtime thresholds beyond the normal 40 hour week, which means that officers in such departments are not entitled to FLSA overtime until they have exceeded the "7(k)" thresholds. More information on alternative work periods.
Police employers may pay some FLSA overtime with "comp. time" instead of cash. Comp. time systems must be set up properly, and there are some fairly complicated rules governing FLSA comp. time. Comp. time in lieu of cash for FLSA overtime must be paid at time and one-half. Employees must generally be permitted to "burn" comp. time when they want to. An employer may not generally prohibit employees from taking off accrued comp. time (with reasonable advance notice) unless the employee's absence will create a genuine operational hardship within the Department. Having to call-in another officer for shift coverage is not likely to be considered an operational hardship (but is rather a financial matter). There may not be a "use it or lose" it requirement, however police employers may require officers to "burn" accrued FLSA comp. time. A Department may establish a "cap" on the number of hours officers may carry in their FLSA comp. time banks, in any amount up to 480 hours.
There are some FLSA issues which are peculiar to EMTs and paramedics, and especially those who work for public-sector employers.
Some government employers compensate their EMS employees under the special "€7(k)" work period rules which more typically can apply to firefighters (and police officers). In these situations, EMS employees are not paid overtime until they meet a "threshold" larger than the normal 40 hour work week. This is sometimes legally permissible, and sometimes not. The subject has been addressed in several court decisions and has provoked a recent (December, 1999) amendment to the FLSA statute. More information on alternative work periods.
The €7(k) pay rules can apply to "employees engaged in fire protection activities." These are now defined in the statute (€203[y]) as follows: `Employee in fire protection activities' means an employee, including a firefighter, paramedic, emergency medical technician, rescue worker, ambulance personnel, or hazardous materials worker, who
- is trained in fire suppression, has the legal authority and responsibility to engage in fire suppression,
- and is employed by a fire department of a municipality, county, fire district, or State, and is engaged in the prevention, control, and extinguishment of fires or response to emergency medical situations where life, property, or the environment is at risk.
Thus, to qualify for €7(k) pay as a fire protection employee under this statutory definition, an EMS employee must
- work for a (government) fire department,
- be trained in fire suppression,
- have the legal authority to fight fires,
- have the responsibility to fight fires,
- and either actually engage in fire suppression work or non-fire emergency responses.
How this new statute will be interpreted by the courts is as yet unknown. For example, the statute does not specify what "trained in fire suppression" means. Nor does the statute specify what is meant by "responsibility to engage in fire suppression." However, it is likely that "real" fire fighters will be qualified for 7(k) scheduling and pay as employees in fire protection even if their normal jobs are to provide medical services and not fire suppression. It is also fair to predict that "single function" EMS workers (who are not trained in fire suppression) and who work for fire departments, may not be scheduled or paid as fire protection employees under €7(k).
Also unresolved is whether €7(k) can ever be applied to government EMS employees who do not work for fire departments. The new statute limits application of the "fire protection" standards of €7(k) to employees of fire departments. However, €7(k) may also apply to "employees engaged in law enforcement activities." Several courts have historically implied or ruled that activities such as responding to vehicle accidents when there is no danger of fire is a "law enforcement" activity, and the courts have therefore implied that some government EMS employees might qualify under the "law enforcement" section of €7(k) depending on what kind of calls they actually and typically responded to.
Government police officers, fire fighters, and (some) EMS employees may be paid either on the standard 40 hour work week or on so-called "7(k)" systems (which are also sometimes called "Garcia cycles"). 29 USC €207(k). In 7(k) systems, FLSA overtime pay is due if, when, and to the extent a police officer, fire fighter or EMS employee actually works more than the number of hours specified by the Department of Labor as applying to a particular "work period." For example, under a "14 day 7(k) work period" system a police officer is due FLSA overtime pay only if, when and to the extent actual hours worked exceed 86 in the 14 day work period. Under a "28 day 7(k) work period" a fire fighter is due FLSA overtime pay only if, when and to the extent actual hours worked exceed 212 in the 28 day work period. Permissible work periods may be from 7 to 28 days, and the FLSA overtime thresholds applicable to particular work periods are set out in a chart published in the FLSA regulations. 29 CFR €553.230.
A government employer may choose to use a 40 hour work week or a 7(k) system at its option, and may use a 7(k) system for FLSA compliance purposes even if it actually pays its employees on the basis of 40 hour work weeks. To use a 7(k) system for FLSA purposes requires only that the employer establish such a system (for example, by issuing a policy statement to that effect), and that the affected employees actually work on a schedule which repeats and recurs on some multiple of between 7 and 28 days. Which particular 7(k) threshold applies depends mostly on what the employees' schedule is. For 7(k) systems, pay computations mostly follow the regular FLSA rules, with the "work period" being substituted for the normal "work week."
Alternative 7(k) work period systems are not available to private sector (non-government) employers, which (with the exception of medical care personnel) must pay nonexempt employees based on 40 hour work weeks. For government employers, 7(k) systems are available for "sworn" fire fighters (even if their primary work is medical) or police officers. In some unusual situations "non-sworn" EMS employees may possibly qualify for 7(k) "law enforcement" pay plans.
If you feel you may be owed unpaid overtime pay and you would like to pursue your claim, please contact us or fill out our questionnaire and we will call you.