Employers will sometimes scam employees by giving them a title of “Administrator” to have them be salaried employees who are not entitled to overtime. An employee entitled as an “Administrator” may nevertheless be legally entitled to overtime payments if certain criteria are met.
Both the Federal Fair Labor Standards Act (FLSA) and New Jersey Wage and Hour Law which incorporate much of the FLSA, define the circumstances by which employees are exempt from the right to receive overtime payments.
Job Title of “Administrator” Is Insufficient to Deny Overtime
Under the FLSA and Federal Code 29 CFR 541.2, a job title alone is insufficient to establish the exempt status of an employee to which the employee would otherwise be entitled to overtime pay. The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee’s salary and duties meet the requirements of the FLSA regulations.
Section 13(a)(1) of the FLSA provides an exemption from the FSLA’s minimum wage and overtime requirements for any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of an outside sales employee, (terms which are defined and delimited from time to time by Secretary of Labor.)
Section 13(a)(17) of the Act provides an exemption from the minimum wage and overtime requirements for computer systems analysts, computer programmers, software engineers, and other similarly skilled computer employees.
General Rule for Bone Fide Administrative Employees Exempt from Overtime under Federal Regulations
Under § 541.200, the term “employee employed in a bona fide administrative capacity” means the employee to be primarily engaged in non-manual work and other requirements. In section 13(a)(1) of the Act it shall mean any employee who is:
(1) Compensated on a salary or fee basis pursuant to § 541.600 at a rate of not less than $684 per week (or $455 per week if employed in the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands by employers other than the Federal government, or $380 per week if employed in American Samoa by employers other than the Federal government), exclusive of board, lodging or other facilities;
Must Be Non-Manual Work
(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
Must Exercise Discretion and Independent Judgment
(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
What Is Meant by “Directly Related to the Management or General Business Operations”?
Under § 541.201 (a), to qualify for the administrative exemption, an employee’s primary duty must be the performance of work directly related to the management or general business operations of the employer or the employer’s customers. The phrase “directly related to the management or general business operations” refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business. The statute lists as examples of what would not be considered directly related, would be an employee working on a manufacturing production line or selling a product in a retail or service establishment.
Examples of Work That Directly Relates to Management or General Business Operations
Under § 541.201(b), work directly related to management or general business operations includes, but is not limited to, work in functional areas such as:
Tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities.
Note: Some of these activities may be performed by employees who also would qualify for another exemption.
It Must Be the Employee’s Primary Duty
Under § 541.201(c), an employee may qualify for the administrative exemption if the employee’s primary duty is the performance of work directly related to the management or general business operations of the employer’s customers. An example given by this regulation are those employees acting as advisers or consultants to their employer’s clients or customers (as tax experts or financial consultants, for example) may be exempt.
“Discretion and Independent Judgment” Is Not a Bright Line Rule but must Be Applied in Light of All the Facts Involved in a Particular Employment Situation
Under § 541.202(a), to qualify for the administrative exemption, an employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. The term “matters of significance” refers to the level of importance or consequence of the work performed.
Under § 541.202(b), the phrase “discretion and independent judgment” must be applied in the light of all the facts involved in the particular employment situation in which the question arises.
The Regulation lists factors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance. These factors include, but are not limited to whether the employee:
Has authority to formulate, affect, interpret, or implement management policies or operating practices;
Carries out major assignments in conducting the operations of the business;
Performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business;
Has authority to commit the employer in matters that have significant financial impact;
Has authority to waive or deviate from established policies and procedures without prior approval;
Has authority to negotiate and bind the company on significant matters;
Provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives;
Investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.
A Higher Authority’s Review of Employee’s Decisions Does Not Necessarily Negate the Required Discretion and Independent Judgment Element
Under § 541.202 (c), discretion and independent judgment implies that the employee has authority to make an independent choice, free from immediate direction or supervision. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level. Thus, the term “discretion and independent judgment” does not require that the decisions made by an employee have a finality that goes with unlimited authority and a complete absence of review. The decisions made as a result of the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The fact that an employee’s decision may be subject to review and that upon occasion the decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment.
If You Quit Your Job, You May Lose Right to Prevail in a Lawsuit
If you quit your job, you may lose right to prevail in a lawsuit. If you are thinking of quitting, or you think you will be fired, you should know that you may lose your right to prevail in a lawsuit unless you first take certain legally required measures to preserve your job while you are still employed. If you are thinking of quitting, or think you will be fired, you should contact this office immediately to discuss your options in the safest way for you.
If You Have Been Terminated or Retaliated Against for Demanding Your Rights
If you have been suspended, had your hours slashed, or were terminated or threatened with termination for demanding wage and overtime pay for which you are entitled, contact Hope A. Lang, Attorney at Law today for a free consultation.
What You Can Do
I am an aggressive and compassionate employment law attorney who is experienced in successfully representing employees who suffered illegal discrimination in wages. If you find yourself in a situation with inadequate job security because of the aforementioned issues, if you are thinking of resigning, or have been fired or think you will be fired, it is important that you consult with an attorney who is experienced in discrimination.
I am successful in bringing employee lawsuits against governmental entities and private employers and recovering money for victims of age, race, sex, disability, sexual orientation, and other discrimination. If you think you are being pushed out of your job or retaliated against, you should contact this office immediately for a free consultation.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and in every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.