Should your office manager be exempt?
Wednesday, June 21, 2017
Determining whether a position meets the Fair Labor Standards Act (FLSA) for overtime exemption is fairly straightforward for most positions. However, executive assistants and office mangers — roles that so many leaders rely so heavily on — are often classified as exempt from overtime by the organization, but considered eligible for overtime by the federal government.
Here is the good news and bad news about whether that office manager is really exempt.
But she runs the office!
Office managers are a critical part of any organization. They know where everything is and why; what everyone does and how well; and who the critical clients, partners and vendors are, and how to keep them happy.
In general, the office manager is often responsible for and credited with keeping the entire office running smoothly. Because of that, the position is often classified as exempt from overtime.
However, like the executive assistant position, just because the role is critical to operations, and may even serve as the right hand to the CEO, it is not necessarily exempt.
According to the FLSA, to qualify for an administrative exemption, the primary duties of the position must be "directly related to the management or general business operations" and include "the exercise of discretion and independent judgment with respect to matters of significance."
While most people would agree an office manager’s duties meet this standard and that the office manager does exercise discretion, the gray area is around the phrase "matters of significance." In this case, significance is not the same as importance.
The Department of Labor clarifies factors to consider related to determining whether the work is of significance here. In short, the ability to change, implement or not follow policies without approval is one example that often proves difficult to defend when arguing that the office manager should be exempt.
The best thing to do with any question regarding classification is to contact an attorney that specializes in employment matters. While it may seem easier to just talk through it with the employee filling the position, doing so is risky.
If a position is misclassified, the employee may be eligible for payment of back wages, which at the very least can be difficult to calculate. Further, even if the employee wants to be exempt and states she is happy to sign something agreeing to forego overtime, it may be illegal to do so.
Instead, leaders can work in partnership with human resources to determine how long the employee has potentially been misclassified; how the employee may react if her exemption status is changed; and what documentation is in the file delineating the position duties and status. She can bring this information to the attention of the attorney for guidance on how to approach next steps.
The bottom line is that the classification system is established and enforced by the federal government; employers should aim to comply and bring any questions to the attention of an employment attorney as soon as possible.
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