DOL Ruling

Sunny

I'm revisiting my DOL Wage & Hour Investigation. The investigator was here in early December and the final conference was yesterday. The visit was based on the complaint of a non-exempt office person who was fired. She claimed we failed to pay her about 20 hours of overtime. This phantom overtime was not authorized, not seen to be worked by anyone, and not put on her time card. She "kept" a separate calendar which she did not share with the Company. In any case, we owe her $248.63 - the investigator said that even though she found we always pay overtime and there were no time cards reflecting that she worked this overtime, and her job duties did not require that she work overtime - we have to pay her.

That's bad enough but she also said we have to pay 2.5 hours a week of half-time for one of our engineers who she decided is not exempt - and therein lies my question. The basis for her decision is that this individual has a two-year degree. Has anyone heard of this as a legal basis for denying professional exemption. She did not claim that his job duties were not those of an engineer - just that he didn't have a four-year degree. He was trained in-house and has highly specialized knowledge but she just kept repeating that in the view of her agency a four-year degree is required for this exemption. We are planning to consult our labor attorney but I know there is someone in this forum who has had experience with this. Any insight would be greatly appreciated.

By the way - do anything you can to avoid one of these government forays. It was a nightmare.

Thanks and sorry to be so long-winded,
Sunny

Don D

Sounds like a rather green investigator to me. What's your attorney say?

Sunny

Don - This happened late yesterday so we are still waiting for an answer from the attorney. The investigator will be back Monday afternoon for our response.

Gillian

While I can't speak for the DOL, the Ca. state wage and hour people would view a two year degree as a non-exempt position. Their view would be that the two year degree is part of the learning process which ultimately leads to a professional level, attained when a person reaches the four year degree level. Even that level would be scrutinized a bit to make sure that the work was actually at the four year degree level, but most are exempt in my experience. If an individual was a certified engineer then it would be clear.

Don D

We have exempt engineering technicians who, I suppose then, would have to be non-exempt in California, if the decision were to be determined by the educational attainment level. Apparently that is the standard in California, rather than the duties of the job. Our techs utilize a great degree of independent judgement in carrying out their functions. They operate all day long without supervision, routinely make business decisions about the setup and operation of machines and production lines and are ultimately responsible for the consequences of failures. They also train and direct the work of hourly production employees and receive salaries that are not reduced for quality or quantity of work or hours worked. No, they don't have an engineer's degree, but function at that level for the most part and are classified as exempt.

MS HR

I'd have to agree with Gillian in that a 2 year degree wouldn't make for an exempt employee based on the professional exemption.

Don D

MS HR: Whereas California law entertains educational attainment to determine exempt status, it's my understanding that the Federal statutes address job duties and responsibilities and minimum level of pay. Mississippi law is silent on exemption. As I understand the Federal law, merely saying an employee is exempt because you call him by a certain job title does not meet the exemption test; however, if a thorough analysis of a particular employee's job duties and responsibilities results in his meeting one of the tests outlined in the FLSA, then he is exempt. The test is the key, not the job title.

MS HR

Don,
I agree. What I am saying is that you can't make a person exempt simply because he has a two year degree.

Hunter1

First of all, I'd say 'congratulations' on your audit. If that's all they found, I'd say you're running a pretty good shop. This may be too late, but is there a chance that your state recognizes something like a professional engineer designation based on a combination of education and experience? Sounds like this employee may have the equivalent of a degree, although DOL may not recognize that either.

Sunny

First of all I need to clear something up - we exempted this individual in August of 2001 based on a change in job duties and a promotion - nothing to do with his two year degree. This is an employee with 8 years of service who trained on the job and has reached a level where he trains others, makes decisions on design matters, deals with customers on job sites, etc. The DOL investigator flat out said she didn't care - he didn't have a degree so he was not exempt. And I guess that is the sticking point for us - in all other cases, job duties are the determining factor. In this case they are not - and we are not in California where at least the rule is clear but in Alabama where I run into very few state rules in employment matters.

Thanks for the suggestion but it's way too late to get him a professional designation although that may be something to look into for the future. We hope to talk more about this with our attorney today and maybe come up with something. We are talking about $1200 or so in back pay - not a major hit - but it is the principle of the thing. Even the government ought to have to be consistent, at least within the same investigation.

Thanks everyone for the responses - I'll keep you posted.

Rockie

I have always thought the exemption was based on duties and responsibilities of the position - not necessarily the degree. Our CEO does not have a four year degree - does this mean he is not an exempt individual? He runs a multi-million dollar corporation and makes high level decisions everyday. Maybe this is something that applies just to the "engineering" group much like "computer programmers" have their own little glitches in the wage and hour law.

I agree. If this is all your investigator found - you are darn lucky. I can guarantee you they will dig until they do find something. If nothing else, they take the word of a disgruntled employee who "keeps her own records", which opens up the gate for every employee to keep a separate "dossier" on their employers, whether real or fabricated.

We had a similar situation with a DOL investigator. We had an employee who was out on leave, came back for two days and then quit. She failed to clock in or out or to present any time records. She filed a complaint with the DOL stating that we refused to pay her. We didn't know a thing about it nor had anything been presented asking for payment of wages. To make matters worse, this investigator had a personal issue with our medical practice which had involved a family member of his. He blatantly threatened our payroll person, stating that he could have sued us for this infraction against his relative but he "didn't hold grudges". I promptly called his supervisor, stated the issue and promptly asked that he be recused from our case which he was immediately.

I advised the supervisor that we had every intention of paying this person but we simply needed to know what hours she worked as she had never presented any time records. As soon as we had these, we wrote out a check and that was the end of it. We probably could have fought this and dragged it out, maybe even triggering an investigation, but it wasn't worth it for less than a hundred dollars.