In a BLR webinar entitled "Overtime: Legal Strategies for Whittling Down Your Payouts Without Breaking the Law," Harold (Hal) M. Brody, Esq., partner, and Fredric C. Leffler, Esq., Senior Counsel in the Labor and Employment Law Department of Proskauer Rose LLP described the key factors in determining who's really entitled to overtime.
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- There are three major exemptions: Executive, Administrative and Professional
- Take into account the duties test plus the Salary Basis test
- The employee's title and being paid a salary are not determinative, yet many employers still get this wrong
An exempt Professional employee is one who:
- Earns more than $455 per week ($23,660 annually) exclusive of board, lodging or other facilities; and
- Is either a "learned" or "creative" professional
A "learned" professional (Sec. 541.301) means:
- Performing work requiring advanced knowledge in a science or learning field customarily acquired by a prolonged course of specialized intellectual instruction and study as opposed to general academic education or an apprenticeship
A "creative" professional (Sec. 541.302) means:
- The primary duty is the performance of work requiring "invention, imagination, originality or talent in a recognized field of artistic or creative endeavor (such as music, writing, acting , painting, and graphic arts)"
- This exemption does not apply to employees performing routine mental, manual, mechanical or physical work that can be produced by a person with general manual or intellectual ability and training as per 29 C.F.R. Sec. 541.302(a)
- Meets other elements above
Examples of "learned" and "creative" professionals include:
- Registered Nurses
- Dental Hygienists
- Certified Public Accountants (CPAs)
- Accountants who are not CPAs but perform similar duties may or may not qualify as exempt
- Conversely, accounting clerks and bookkeepers, and other employees who perform a great deal of routine accounting work will not qualify as exempt
- Funeral Directors and Embalmers
- Teachers
- Journalists (depending on the extent of control exercised by the employer and the level of creativity involved)
- Doctors
- Lawyers
- Actors
- Painters
- Musicians and Composers
Harold (Hal) M. Brody, Esq. is a partner in the Labor & Employment Law Department with Proskauer Rose LLP (www.proskauer.com). His practice is characterized by its diversity and he has represented employers in virtually every facet of labor and employment law. Fredric C. Leffler, Esq. is a Senior Counsel in the Labor & Employment Law Department and co-head of the Employment Law Counseling and Training Group. He represents major private and not-for-profit employers in all aspects of labor and employment law.