More Mistakes Employers Make

By Diane Cadrain Apr 1, 2008

HR Magazine, April 2008 Guard Against FLSA Claims

"Employers put the cart before the horse," says Wes Redmond, a shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz in Birmingham, Ala. "They think that if they pay a salary, the person is exempt. But it works the other way—it's the job duties and not the salary that counts."

"Employers confuse the importance of the job with the application of the exemption," says Lee Schreter, a shareholder with Littler Mendelson in Atlanta. "For example, if a courier carrying thousands of dollars in bonds loses the bonds, the consequences are severe for the organization, but that doesn't make the courier exempt from the Fair Labor Standards Act. The fact that your mistakes might cost money doesn't make you exempt. You have to ask, 'What decisions is this person making? And with what authority?'"

There's litigation regarding assistant managers in the retail area, people who were misclassified as executives, says Redmond, listing big verdicts against Ralph's and Albertson's grocery chains, Bed Bath and Beyond, Family Dollar, and Dollar General. "The assistant managers spent too much time doing nonmanagement work, like stocking shelves, and without the discretion required for the executive exemption."

Misclassification litigation most often occurs among those with job titles such as claims adjuster, loan officer and broker, according to attorney Tammy McCutchen, a shareholder in the Washington, D.C., law office of Littler Mendelson. She lists the following examples of likely misclassifications:

  • Loan officers who used computer programs to make initial lending decisions. "30 years ago, they used to make actual loan decisions. Now, in some banks, the lending information goes into a computer, and the computer makes the initial decision. Thirty years ago, the loan officer would be exempt because they put the bank's assets on the line," she says.

  • Corporate trainers who use prewritten training materials, but exercise no discretion.

  • Coordinators who coordinate travel schedules and meetings and time lines for projects.

  • Communications workers who don't deal with the press and only do proofreading or copy editing.

  • Employees who create PowerPoint presentations for executives. "Finding the right clip art isn't the exercise of discretion and independent judgment," says McCutchen.

  • Recruiters who only compare minimum qualifications of the jobs to peoples' resumes.

Diane Cadrain, an attorney and writer, has been covering workplace law for 20 years and is a member of the Human Resource Association of Central Connecticut.


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