Overtime Law You Should Know – Infographic

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1. Our accountant has advised us that clerical, administrative staff have to be paid overtime yet your infographic says otherwise. We are in NY if this makes any difference which I can’t imagine. Can you please point me to where I can verify this information?

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   1. Karen,

      Your accountant is probably right but it is hard to know with just a job title. The FLSA does include “administrative” in their job titles of exempt employees but job titles really don’t tell you much. You have to dig a little deeper to know for sure.

      “Whether the duties of a particular job qualify as exempt depends on what they are. Job titles or position descriptions are of limited usefulness in this determination. (A secretary is still a secretary even if s/he is called an “administrative assistant,” and the chief executive officer is still the CEO even if s/he is called a janitor.) It is the actual job tasks that must be evaluated, along with how the particular job tasks “fit” into the employer’s overall operations.

      There are three typical categories of exempt job duties, called “executive,” “professional,” and “administrative.”

      ” Exempt Administrative job duties.

      The most elusive and imprecise of the definitions of exempt job duties is for exempt “administrative” job duties.

      The Regulatory definition provides that exempt administrative job duties are

      (a) office or nonmanual work, which is
      (b) directly related to management or general business operations of the employer or the employer’s customers, and
      (c) a primary component of which involves the exercise of independent judgment and discretion about
      (d) matters of significance.

      The administrative exemption is designed for relatively high-level employees whose main job is to “keep the business running.” A useful rule of thumb is to distinguish administrative employees from “operational” or “production” employees. Employees who make what the business sells are not administrative employees. Administrative employees provide “support” to the operational or production employees. They are “staff” rather than “line” employees. Examples of administrative functions include labor relations and personnel (human resources employees), payroll and finance (including budgeting and benefits management), records maintenance, accounting and tax, marketing and advertising (as differentiated from direct sales), quality control, public relations (including shareholder or investment relations, and government relations), legal and regulatory compliance, and some computer-related jobs (such as network, internet and database administration). (See Computer employees.)

      To be exempt under the administrative exemption, the “staff” or “support” work must be office or nonmanual, and must be for matters of significance. Clerical employees perform office or nonmanual support work but are not administratively exempt. Nor is administrative work exempt just because it is financially important, in the sense that the employer would experience financial losses if the employee fails to perform competently. Administratively exempt work typically involves the exercise of discretion and judgment, with the authority to make independent decisions on matters which affect the business as a whole or a significant part of it.

      Questions to ask might include whether the employee has the authority to formulate or interpret company policies; how major the employee’s assignments are in relation to the overall business operations of the enterprise (buying paper clips versus buying a fleet of delivery vehicles, for example); whether the employee has the authority to commit the employer in matters which have significant financial impact; whether the employee has the authority to deviate from company policy without prior approval.

      An example of administratively exempt work could be the buyer for a department store. S/he performs office or nonmanual work and is not engaged in production or sales. The job involves work which is necessary to the overall operation of the store — selecting merchandize to be ordered as inventory. It is important work, since having the right inventory (and the right amount of inventory) is crucial to the overall well-being of the store’s business. It involves the exercise of a good deal of important judgment and discretion, since it is up to the buyer to select items which will sell in sufficient quantity and at sufficient margins to be profitable. Other examples of administratively exempt employees might be planners and true administrative assistants (as differentiated from secretaries with fancy titles). Bookkeepers, “gal Fridays,” and most employees who operate machines are not administratively exempt.

      Merely clerical work may be administrative, but it is not exempt. Most secretaries, for example, may accurately be said to be performing administrative work, but their jobs are not usually exempt. Similarly, filing, filling out forms and preparing routine reports, answering telephones, making travel arrangements, working on customer “help desks,” and similar jobs are not likely to be high-level enough to be administratively exempt. Many clerical workers do in fact exercise some discretion and judgment in their jobs. However, to “count” the exercise of judgment and discretion must be about matters of considerable importance to the operation of the enterprise as a whole.

      Routinely ordering supplies (and even selecting which vendor to buy supplies from) is not likely to be considered high- enough to qualify the employee for administratively exempt status. There is no “bright line.” Some secretaries may indeed be high-level, administratively exempt employees (for example, the secretary to the CEO who really does “run his life”), while some employees with fancy titles (e.g., “administrative assistant”) may really be performing nonexempt clerical duties.” http://www.flsa.com/coverage.html

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