Exemption not lost for performing some non-exempt work - Court Report

Counts v. South Carolina Electric & Gas Company, 4th Cir., No. 02-1131, Jan. 31, 2003.

Employees who were otherwise exempt from the requirements of the Fair Labor Standards Act (FLSA) did not become entitled to overtime pay for performing five weeks of non-exempt labor over an 18-month period, the 4th Circuit Court of Appeals has held.

The plaintiffs were salaried employees of South Carolina Electric and Gas Company, who were properly classified as exempt administrative employees under the ELSA and therefore not eligible for overtime pay. Approximately every 18 months, the electric company had to shut down its plant for about five weeks to perform routine maintenance.

During the shutdown, certain employees who otherwise performed ELSA-exempt duties were reassigned to non-exempt jobs. They were not paid overtime for hours worked in excess of 40 in a week during the shutdown. Rather they continued to receive their normal salary regardless of hours worked. Once the routine maintenance was completed, these employees returned to their regular exempt job duties.

The 4th Circuit affirmed the trial court's dismissal of the employees' overtime claims. The court determined that the employees' duties were primarily administrative in nature, pointing to language in the FLSA regulations describing "primary duties" as encompassing "the major part, or over 50 percent, of the employee's time." The employees met this standard because they were required to perform non-exempt duties for only five weeks during an 18-month period.

The court noted that the FLSA regulations set forth two separate tests for determining whether an employee is exempt from overtime pay. Under the "long test," an employee's job duties are examined on a week-by-week basis, which is the approach that plaintiffs advocated in this case. However, the long test applies only to very low-paid workers.

For those earning a salary of more than $250 per week, like the ones in this case, the "short test" applies. That test focuses on whether an employee's "primary duties" involve exempt work, rather than a week-by-week approach.

RELATED ARTICLE: Professional Pointer

In today's business climate of workforce downsizing employees often are called on to take up the slack and pitch in where needed no matter what their FLSA classification. In these circumstances companies must be mindful of whether a task is exempted or non-exempt and must ensure that FLSA-exempt employees perform "primarily" exempt labor to retain that designation.

DECLAN C. LEONARD OF THE LAW FIRM OF ALBO & ORLON IN ARLINGTON, VA.

COPYRIGHT 2003 Society for Human Resource Management
COPYRIGHT 2003 Gale Group