Knowledge007,
I'm going to attempt to answer your question by providing you with
quotes or paraphrases of the current FLSA regulations, a brief
analysis and summary which will discuss how I believe these will
affect you, and then some examples of case law to show you how these
regulations are applied in practice. I would like to remind you that I
am not an attorney and that none of this constitutes legal advice.
Instead, I invite you to think of me as a fancy librarian. If you
intend to put any of my research into practice, I recommend that you
consult with a real attorney who specializes in labor law.
The FLSA is the federal Fair Labor Standards Act which has been around
in various forms since 1938. Among other things, it defines which
employees are eligible for overtime pay. Employees eligible for
overtime pay must be paid 1.5X their hourly wage for each hour worked
over 40 in a single week, and have "non-exempt" status. Employees not
eligible for overtime pay are considered "exempt" from the rules.
The Department of Labor lists some "commonly used exemptions" at [
http://www.dol.gov/elaws/esa/flsa/screen75.asp ]. Since you are
specifically asking about technical support employees, most of these
categories (such as "farmworkers," "seasonal and recreational
establishments," and "babysitters on a casual basis") are irrelevant
to you. The two categories which you should probably examine closely
are "white collar employees" and "computer professionals."
First, let's look at the rules regarding "white collar employees." I'm
providing my web references and quotes from the Texas Workforce
Commission web site because I feel that the TWC has organized the
material in an easily accessible manner. Despite the fact that this is
a Texas state agency, the overall context makes very clear that these
are federal rules, and not rules specific to the State of Texas. If
you wish further confirmation and paraphrasing of these rules, look
below where I've listed my "Search Strategy" -- the first two searches
pull up dozens of links which all describe the same rules.
TWC's web pages on FLSA start at [
http://www.twc.state.tx.us/news/efte/flsa_does_and_doesnt_do.html ]
and continue for 5 pages (click the forward arrow at the top of the
page to go to the next one).
On the 3rd page at [
http://www.twc.state.tx.us/news/efte/exemption_categories_flsa.html ],
we see that "Exemption categories under the FLSA" include "many minor
exemptions for jobs in certain protected or favored industries,"
"'white collar' overtime exemptions: executive, administrative,
professional, outside sales representative," and that "two tests
apply: the duties test and the salary test" in order to determine
eligibility for these exemptions. The "salary test" is outside the
scope of your question, though I suggest that you read through the TWC
page describing how it applies.
Since I have no idea what your industry is, I cannot address your
eligibility for an industry exemption.
The duties tests are described on TWC at [
http://www.twc.state.tx.us/news/efte/duties_test_for_exempt_employees.html
] as follows:
" * Executive: an executive exempt employee has the authority to hire,
fire, promote, set policy, and supervises two or more employees in
managing an enterprise or subdivision of the enterprise - examples
given in the regulations include the president of a company or the
head of a major division of an enterprise - also, a department head
with hiring and firing authority can qualify - if the employee has no
hiring or firing authority, but is highly influential in such
decisions, the executive exemption can still apply."
Another useful website published by Union Firefighters at [
http://www.unionfirefighters.net/labor/flsaex.htm ] expands upon this
definition:
"The "executive" exemption applies to "managers." A manager, under the
FLSA, must regularly supervise two or more employees. However,
supervisory responsibilities are not enough. To be exempt, an employee
must also have "management" activities as his or her primary duty.
S/he must be "in charge" (at least sometimes) of a recognized unit or
subunit within the company or organization, and must "make decisions"
on behalf of the company or organization which are of genuine
importance to its business. Exempt executives may still perform a
variety of "nonexempt" tasks, if "management" is nonetheless their
primary duty. However, a "working foreman" is not considered an
executive, and if an employee performs "production" work
(non-management, "line" work) or "clerical" work more than 50% of the
time this is some indication that s/he is not an exempt executive."
Here's the TWC definition of Administrative:
" * Administrative: performs specialized or technical office or
non-manual work related to management policies or general business
operations of an enterprise - the decisions such an employee makes are
of substantial importance to the company as a whole - their work
supports the organization, not individual customers - has a great deal
of discretion and independent judgment in day-to-day duties - examples
given in the regulations include personnel director, vice president of
operations, head buyer, head dispatcher, department head."
And, for comparison, here's Union Firefighters':
"The "administrative" exemption applies to relatively high level
"support" or "staff" personnel within an organization, who perform
(either) "office" or "nonmanual" work. Exempt administrative
employees' work is directly and primarily related to management
policies or general business operations, and requires the exercise of
judgment and discretion. Examples might be (true) administrative
assistants, buyers, and planners -- although again it is important not
to confuse job titles with actual job duties. With the same proviso,
bookkeepers, "gal Fridays," many "executive secretaries" and most
employees who operate machines or devices are not administratively
exempt employees. It is also important to distinguish the exercise of
judgment and discretion (exempt work) from the use of even high level
skills (nonexempt work) in performing job tasks. If an employee is
engaged in "production" s/he is not an exempt administrator.
("Production" work means making the "product" the company or
organization "produces," and is not limited to traditional
manufacturing. A police detective, for example, is participating in
"production work" for a police department, which is "in the business"
of making criminal investigations.)"
Finally, there's the definition of Professional, for which I'm only
going to quote the TWC page:
"* Professional: performs original and creative work or work requiring
advanced knowledge normally acquired through a prolonged course of
specialized academic study; a professional exempt employee's work
cannot be standardized with respect to time - examples given in the
regulations include physician, attorney, CPA, engineer, architect,
scientist (geologist, botanist, physicist, zoologist, chemist, etc.),
registered nurse, and teacher at any educational institution"
I suspect that technical support employees would not be covered under
the "Professional" exemption as described above. Given the requirement
for "a prolonged course of specialized academic study," I doubt that a
simple tech support job would qualify. The type of "engineer"
described is probably not intended to include a "network engineer" who
does nothing more than pull wire cables or a "systems engineer" who
assembles hardware. Note that a very specific exemption rule DOES
apply to computer professionals, but since its rules are different
from other professionals, I am going to discuss it separately.
Before I discuss the "Executive" and "Administrative" exemptions, I
think it's wise to emphasize the following paragraph from Union
Firefighters' page which discusses the difference between a title and
reality:
"For any of these exemptions, "job titles" are relatively unimportant.
If a secretary is called an "administrative assistant" s/he is still a
secretary. And if the president of a company chooses to call herself
the janitor, s/he is still an executive. What counts is what the
employee actually does at the job on a day in, day out basis -- the
job tasks."
Just because you give an employee a job title of "manager" does not
mean that they fit all the legal requirements under the FLSA of being
a manager. Similarly, "exercise of judgement and discretion" must
actually mean that the employee has the right to make critical
decisions on behalf of the company. Example: Have you ever called your
credit card company to dispute a late fee? Just about any phone
representative probably has the right to remove the fee, but this
probably does not count as real "exercise of judgement and discretion"
under the rule.
My reading of the Executive exemption suggests that only a very
limited number of technical support employees could realistically be
classified as managers, since these managers must devote most of their
time to their management duties rather than assisting with the actual
work of technical support.
The difficultly with applying the Administrative exemption to
technical support employees is the fine line betwen "exercise of
judgement and discretion" and "high level skills." My best guess is
that most technical support employees would not be considered
Administrative unless they were actively involved in setting company
policy or a similar job. Again, it is unlikely that more than a small
handful of tech support people would have a say in company-wide
policies.
The final category of the Duties Test exemptions is the Computer
Software Professional. As legal rules go, this one is surprisingly
readable. I've copied the text of the rule itself from [
http://www.dol.gov/esa/regs/statutes/whd/0002.fair.pdf#Page=18 ]:
(17) any employee who is a computer systems analyst,
computer programmer, software engineer, or
other similarly skilled worker, whose primary
duty is -
(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.
There are some major differences here between Computer Professionals
and the other generic Professional category described above. First,
subparagraphs (a), (b), and (c) give much more detail about the
technical definitions as to what classifies somebody as a Computer
Professional. The most important difference, however, is that the rule
for Computer Professionals is the only one to specify a realistic
minimum salary requirement. Supposedly, subparagraph (d) also negates
the requirement of the Salary Test for Computer Professionals, which
applies to all other exempt employees. In plain English, this means
that unlike all other exempt employees, Computer Professionals can be
paid on an hourly basis for their work rather than with a salary.
Despite the fact that they may earn an hourly wage, they are not
eligible for overtime if their hourly wage is at least 6.5x the
minimum wage.
Another paraphrased version of all these rules can be found as Fact
Sheet #17 from the U.S. Department of Labor at [
http://www.dol.gov/esa/regs/compliance/whd/whdfs17.htm ]. I say
"paraphrased" because all of the above (with the exception of the
Computer Professional rules) is somebody's interpretation of the
legalese of the original rules and laws.
TWC gives a little more detail about what type of computer work is
eligible for exempt status and which work isn't eligible for exempt
status. From [ http://www.twc.state.tx.us/news/efte/salary_test_for_exempt_employees.html
]:
"* the regulations (29 C.F.R. 541.3(a)(4) and 541.303) exclude workers
who build or install computer hardware or who are merely skilled
computer operators; they make clear that the exemption applies only to
the true software programming or design experts
* a DOL letter ruling of December 4, 1998 (BNA, WHM 99:8201) states
that this exemption does not include employees who "provide technical
support for business users by loading and implementing programs to
businesses' computer networks, educating employees on how to use the
programs, and by aiding them in troubleshooting." In other words,
"help desk" employees do not fit this exemption.
* properly speaking, the exemption applies only to the very top
experts in computer software, i.e., the ones who actually write the
software programs, or who design, implement, and maintain a company's
network software, intranet, or Internet presence"
Unfortunately for you, this makes it very clear that the general
category of "technical support" may not be covered by an exemption.
All is not lost, however. I have worked as a highly skilled Systems
Administrator for a large company. My position was considered 2nd/3rd
level technical support and everybody in my department was considered
exempt. In my position, I had only very limited contact with end-users
and desktops, since most of my work was the design, implementation,
and very high-level troubleshooting for enterprise level systems. We
had an affiliated department which handled most of the 1st level
technical support. While the 1st level team frequently worked directly
with end-users to troubleshoot individual problems and perform many of
the tasks described in the DOL letter of December 4, 1998, they were
still considered highly skilled employees who qualified as exempt.
Finally, there were the employees who manned the phone banks and
provided telephone support to open technical support tickets. I
affectionately called these folks "0th level technical support."
Officially, they were called Help Desk. These were the people who had
memorized a few simple steps to solve every problem, and were usually
incapable of "thinking outside the box." When the problem was beyond
their expertise, they would forward the ticket to 1st level support,
and if 1st level support couldn't solve it, I would get a phone call
asking for assistance. To be blunt, I sincerely doubt that the Help
Desk phone support was exempt.
If you're a large enterprise company, you simply must have non-exempt
Help Desk-type employees to deal with the stupidly simple questions
that most people contact technical support for. Though the rules seem
to not allow an exemption for the items in the DOL letter, keep in
mind that you *can* have exempt employees performing these tasks --
you just need to make sure that they have enough other
responsibilities that are considered high level enough to qualify for
exempt status. I simply don't have enough information about your
company to suggest a specific "golden mean," and this is the type of
information you should obtain from a qualified employment lawyer.
Also, don't forget that Executive and Administrative employees are
similarly allowed to spend a small percentage of their time on
non-exempt tasks.
Now, let's move on to a few examples from case law which may be
helpful to you.
All of these were obtained from [
http://216.239.37.104/search?q=cache:QTd6aGLAwDwJ:www.elinfonet.com/fedarticles/9/4/3+flsa+computer+exempt+%22case+law%22&hl=en&ie=UTF-8
].
[ http://www.proskauer.com/news_publications/newsletters/Workplace_New_York/2002_12_00_e/get_data?k=PDF
]
Pages 4-5 of this newsletter contains a short article entitled "Court
Find Computer Network Administrators May Not Be Exempt Under FLSA."
The court decided that the network administrators had no discretion in
their work, so could not qualify under the Administrative exemption.
While the court did not address the Computer Professional exemption,
the author of the article feels that they would not have qualified
under this either due to the low-level nature of their work.
[ http://www.laborlawyers.com/FSL5CS/labor%20letter/LaborLetter1202.pdf
]
Page 3 contains an article "Is Your Employee Really A Computer
Professional" which nicely summarizes much of what I've written above
and gives some concrete examples of what may be included and what
cannot. It also points out that since the Computer Professional
exemption is relatively new, case law has not yet solidly determined
what is exempt and what is not exempt. (This may also explain why 1st
level support at my company was exempt.)
[ http://www.moheck.com/newsletters/EmploymentFocusSpring2001.PDF ]
"Overtime Pay Required for High-Tech Employee"
Page 4 & Page 9. The most important part of this article is a section
near the end giving more detail about the DOL letter I described
above.
From these cases, it sounds as if current case law is leaning towards
classifying anybody who is not obviously a high-level computer
professional as "non-exempt."
In my clarification at the bottom of this page, I stated that the
rules for defining exempt and non-exempt status had recently changed.
It appears that I may have been ahead of myself on this claim.
According to [ http://www.dol.gov/esa/whd/ ], Elaine Chao, the U.S.
Secretary of Labor, announced a proposal to modify the rules governing
exempt and non-exempt status on March 27th, 2003. These measures
included raising the threshold of guaranteeing overtime protections to
those earning under $425/week from the previous amount of $155/week.
It would also lower the education requirements for exempt work from a
university degree to a high school degree, and declare that those
earning over $65,000/year were completely ineligible for overtime. A
debate ensued in Congress, and on July 10th, the U.S. House of
Representatives defeated a measure that would have blocked Chao's
proposal by a thin margin of 213-210.
While it looks likely that this proposal will be allowed to pass in
some form, the debate appears far from over. Since I believe that it
is very likely that the legislative, judicial, and/or executive
branches of government may rewrite parts of the proposal before
enforcement begins, I feel it would be inappropriate to advise you
about rules that may or may not actually be in effect next year.
Recent news articles describing the issues at stake may be found from
[ http://news.google.com/news?hl=en&edition=us&q=flsa+exempt&btnG=Search+News
]. (This is a search at http://news.google.com on the terms "flsa" and
"exempt".)
Based on what I've seen regarding the proposed new rules, they would
probably make it easier for you to classify your employees as exempt.
I hope my research has been useful to you. Do not hesitate to ask for
clarification if needed.
Search Strategy:
[ ://www.google.com/search?as_q=exempt+non-exempt&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=computer+professional&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images
]
Google Search: exempt + non-exempt + "computer professional"
[ ://www.google.com/search?as_q=flsa+exempt+non-exempt+computer&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images
]
Google Search: flsa + exempt + non-exempt + computer
[ ://www.google.com/search?as_q=flsa+computer+exempt&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=case+law&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images
]
Google Search: flsa + computer + exempt + "case law"
[ http://news.google.com/news?hl=en&edition=us&q=flsa+exempt&btnG=Search+News
]
Google News Search: flsa + exempt
/ephraim |
