In this era of corporate belt-tightening at the expense of Wisconsin’s
white-collar workers, employees need to understand their rights and
employer expectations as defined by the Fair Labor Standards Act of
When the FLSA was amended by the Republican Congress and
President George W. Bush in August 2004, few realized the impact it
would immediately make for all types of salaried employees. The
amendment allowed companies to broaden the definition of employees
who qualify as "exempt" from overtime pay, collecting a
salary instead of an hourly pay rate, without possibility of earning
additional pay for additional hours worked.
This exemption can apply only to employees who are classified as
administrative employees, executive employees, professional
employees, outside sales employees, and highly skilled
computer-related employees. But the 2004 amendment widely expanded
the number of employees in these categories who can be considered
salaried employees, and exempt from overtime pay.
Prior to the 2004 amendment, administrative staff could only be
considered as salaried exempt if those employees carried a
"position of responsibility," such as a middle management
role. The amendment, pushed through by a Republican Congress just
months before losing power, changed the definition to exempt
administrative employees who have "discretion and independent
judgment as to matters of significance." What does this mean?
Simply by changing job descriptions, companies all over the U.S.
used the 2004 FLSA amendment to classify millions of additional
employees as exempt from overtime pay. Some human resources
consulting firms even offer specialized services to help employers
rewrite job descriptions to find loopholes to exempt as many
employees as possible. Does an employee have discretion to order
office supplies of his or her choosing? As of 2004, he or she can
likely be qualified as exempt from overtime pay based on the newly
classified high level of responsibility at work.
Why do employers want to exempt as many employees as possible?
That’s an easy one. Who doesn’t like a two-for-one deal? Asking
one employee to perform the equivalent of two or three jobs for the
pay of one employee allows for an increase in the bottom line based
solely on the backs of dedicated workers, who are willing to put up
with just about anything to retain their jobs during an economic
But employers seem to be banking on the fact that employees will
not take the time to understand employee rights as defined under the
original FLSA, and the inherent employee flexibility that salary
exemption brings. In reality, the Fair Labor Standards Act still
carries many employee protections for exempted employees, about
which employers are not always forthcoming.
For example, a common misconception is that an employer can
specifically demand unlimited work hours from exempt white-collar
employees with no additional pay. For many southeastern Wisconsin
companies, this practice has become the status quo, as job cuts have
increased the work requirements of existing employees, leading some
companies to mandate weekend work hours. But by classifying
employees as salaried and exempt from overtime, companies agree to
make an employee’s paycheck dependent upon their job requirements
and work output instead of the number of hours or days of the week
worked. Employers want to simultaneously abuse overtime exempt
classifications while still mandating specific long work hours, but
the law does not allow employers to legally do so.
Fortunately for exempted employees, this employment agreement
carries benefits for both sides. Under exemption status, employees
are responsible for completing all of the work which is assigned to
them. Period. If an employer demands that an employee arrive at work
by 7:30 and leave work no earlier than 5:00, that employer is
setting work hours and treating that employee like an hourly
employee, thereby violating the exemption requirements in the FLSA.
Similarly, if an employer demands that all employees start working
on Saturdays to complete the same amount of work with fewer
employees, that employer is setting specific work hours for an
exempt employee, a breach of the FLSA overtime exemption.
How about current popular trend of mandatory unpaid time off for
salaried exempt employees? Nice try, but no dice. By exempting
employees, employers agree to pay those employees a consistent
salary, regardless of whether or not work is considered available or
unavailable at any particular time.
How about snow days or other days of work missed due to bad
weather? Surely employers can require a salaried employee to use
eight hours of vacation time on a day when that employee is unable
to come to work due to unsafe road conditions, right? In reality,
employers must pay exempted employees for an entire week of work,
even if that employee misses a day or two due to bad weather.
Furthermore, an employer cannot legally demand that exempted
employees recover missed hours later in the week or on the weekend.
Misclassifying employees as exempt carries stiff penalties.
Exempted employees who are determined as misclassified as exempt
based on mandatory work hours, for example, may bring a legal case
against an employer for up to two years of back overtime pay - three
years if the violations are determined to be intentional.
Employee desperation born out of an economic downturn does not
allow businesses to ignore long-established rights of employees in
the white-collar workplace.
(Tim Schilke is the author of "Growing up Red" and
lives in Grafton. His column runs Wednesdays in The Freeman.)