At long last and after much speculation about content and timing, the new final rules for defining exempt status are due out this week (most recent reports suggest they will come out today, May 18th). The rules will set up new standards to meet for positions to be legally exempt from overtime and certain record keeping requirements.
In an important related case, last week a federal court in Florida ruled in summary disposition that a Network Administrator position could be classified as exempt under the “Computer Professional” rules. The case was Ortega v Bel Fuse, Inc. S.D. Fla.166 LC ¶36434.
Unlike the “traditional” exempt classifications of Executive, Professional, Administrative and Outside Sales that were established decades ago after passage of the Fair Labor Standards Act (FLSA), the Computer Professional exemption as a separate classification was enacted in 1996. This relatively new exempt classification was intended to make it easier to classify computer occupations by getting rid of some of the requirements that applied to the older exemptions: educational prerequisites, the exercise of independent judgement and discretion, and being paid on a strictly salaried basis. The Ortega holding breaks no new ground. Rather, it follows other cases that take into account what the position’s overall scope of responsibility as assigned is, and puts less weight on what the position does on a day-to-day basis. Young v. Cerner Corp. S.D New York 503 F. Supp.2d 1226 (2007)
In Ortega, the plaintiff argued that he should not be exempt but should be non-exempt and thus eligible for overtime pay.
The court first looked at whether his position could be exempt under the Learned Professional classification. It found that the position’s primary duty did not require advanced knowledge customarily acquired by a prolonged course of specialized intellectual instruction. The plaintiff had an electrical engineering degree but argued that he did not use it in his network administration job.
The company called his job IT Manager (though he did not supervise anyone) and/or Network Administrator/Engineer II. Most of his job duties were basic network administration such as installing software, running anti-virus software, taking questions from employees on installation problems, hooking up printers and copying hard drives, etc. They did not include doing software development as such. In fact, his attorney argued his job could be done by “half the twentysomethings in America today.”
The Computer Professional classification requires the following tests be met in order to be classified as exempt:
- The employee must be compensated either on a salary or fee basis at a rate not less than $455 per week or $27.63 an hour. (This amount is expected to be higher when the new exemption rules come out.)
- The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below.
- The employee’s primary duty must consist of:
Even though most of the plaintiff’s daily tasks and duties did not involve more sophisticated software, the court relied on a statement he made that “he was in charge of everything with the network.” This statement supported the employer’s position that the broader responsibilities of the job supported the Computer Professional exemption. The court upheld the Computer Professional classification rule stating a truly exempt employee is not just “engaged in the repair or computer hardware and related equipment.” Nor was the job “highly dependent upon, or facilitated by the use of computers and computer software programs, but (was) not primarily engaged in computer systems analysis or other similarly skilled computer-related occupations.” The court held that the position was not in either of those two categories and therefore fell “squarely within” the Computer Professional exemption.
Source: Walters Kluwer Law and Business (Apr. 20, 2016)
ASE Hot Button Briefing will address the DOL’s New Exempt Test Rules
On June 10th ASE will hold a Hot Button Briefing that will provide ASE members an overview of the changes to DOL Wage and Hour regulations. Click here to register. This event is complimentary to ASE members.