Lebau & Neuworth recently found that an employer had wrongly classified an IT Manager as exempt from overtime pay, according to the Fair Labor Standards Act. This employee was labeled as an IT Manager by his medium sized employer. He was laid off and was inquiring about severance negotiations with his former employer. However, in assessing his matter, a Lebau & Neuworth attorney realized that the employer had wrongly classified the employee as exempt from overtime pay. Although the employee was called a “manager,” the facts established he was not truly acting as a manager and, therefore, he was owed a significant amount of overtime wages. Section 13(a)(1) and section 13(a)(17) of the Fair Labor Standards Act (“FLSA”) provide an exemption from both the minimum wage and overtime provisions for computer professionals. Section 13(a)(1) provides for the following exemption for, “any employee employed in a bona fide executive, administrative, or professional capacity . . . .” 29 U.S.C. § 13(a)(1) (2011) (emphasis added). All employees who qualify for the section 13(a)(1) exemptions must meet minimum salary requirements of $455 per week on salary or $27.63 an hour. An employee is employed in a bona fide executive capacity if, their primary duty is the management of the enterprise in which they are employed, they regularly direct the work of at least two other employees, and they have the authority to or can recommend the hiring, firing or promotion of other employees. 29 CFR § 541.100 (2012). An administrative employee is one whose primary duty is non-manual work, “directly related to the management or general business operations of the employer or the employer's customers” and whose primary duties include the exercise of “discretion and independent judgment with respect to matters of significance.” 29 CFR § 541.200 (2012). An employee is employed in a professional capacity if their primary duty requires advanced knowledge that required prolonged schooling. 29 CFR § 541.300 (2012). Section 213(17) applies the same minimum wage and overtime exemption specifically to computer professionals. This includes computer systems analysts, computer programmers, software engineers, or other similarly skilled workers whose primary duties are:
(A) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications;
(B) the design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
(C) the design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
(D) a combination of duties described in subparagraphs (A), (B), and (C) the performance of which requires the same level of skills, and who, in the case of an employee who is compensated on an hourly basis, is compensated at a rate of not less than $27.63 an hour.29 U.S.C. § 213(17) (2011). While a number of job titles are listed in the regulations, as stated in section 541.2 of the regulations, “job title alone is insufficient to establish the exempt status of an employee.” Rather, “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 regulations in this part.” Id. This concept is exemplified in an October, 2006 DOL opinion letter. The issue there was whether the employees in the position of Information Technology (IT) Support Specialist qualified for the section 13(a)(1) FLSA exemption, as employees employed in an administrative capacity. The job duties of IT Support Specialist included, “the diagnosis of computer-related problems as requested by employees, physicians, and contractors . . .” and “problem analysis and research, troubleshoot[ing], and resolv[ing] complex problems either in person or by using remote control software.” FLSA2006-42, Op.D.O.L. 1 (2006). The DOL found that the position was not exempt, stating
Maintaining a computer system and testing by various systematic routines to see that a particular piece of computer equipment or computer application is working properly according to the specifications designed by others are examples of work that lacks the requisite exercise of discretion and independent judgment within the meaning of the administrative exemption. Id. at 5. § 13(17) exemption. So, if you are an IT professional and your employer is claiming you are exempt from the minimum wage and/or overtime provisions of FLSA, be sure that your employer is properly considering the primary duties of your job. If not, you may be owed significant compensation. Call or email us.
