Under the Fair Labor Standards Act, employers can avoid liability for overtime wage claims when a valid exemption to the law applies. One exemption is the administrative exemption. The Secretary of Labor defines an administrative employee as an employee: (1) compensated on a salary or fee basis of not less than $455 per week, (2) whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers, and (3) whose primary duty includes the exercise of "discretion and independent judgment" with respect to "matters of significance."
According to the Department of Labor's regulations, the work of an employee is directly related to management if it is directly related to assisting with the running or service of a business. For example, courts have found that personnel management tasks satisfy this requirement. Lott v. Howard Wilson Chrysler-Plymouth, Inc., 203 F.3d 326, 331-332 (5th Cir. 2000).
Much of the litigation over the applicability of the administrative exemption concerns the third element concerning the mean of the wording "discretion and independent judgment." The Department of Labor interprets the term "discretion and independent judgment" to exist when the employee engages in the "comparison and the evaluation of possible course of conduct" and acts or makes a decision after the various possibilities have been considered.
In order to possess such discretion, the employee must have the authority to make independent choices "free from immediate direction or supervision ... even if their decisions or recommendations are reviewed at a higher level." Some recurring examples of administratively exempt employees have been coordinators, planners, and dispatchers, as set for the in some representative sample cases.
Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261, 267 (5th Cir. 2000) (employees responsible for planning work requirements and who "schedule the availability of materials needed to accomplish that work" for scheduling the construction of battle ships); Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 374 (7th Cir. 2005), (jobs "concerned with the planning, scheduling, and coordination of activities" necessary to discover and rectify any compliance problems at employer's business); Renfro v. Indiana Michigan Power Company, 370 F.3d 512, 518 (6th Cir. 2004) (planners' work required "interpreting and carrying out plant policies, creating plans that permit the continued operation of the equipment and systems that generate ... [the employer's] main product," namely the generation of electric power); Donovan v. Flowers Marine, Inc., 545 F. Supp. 991, 993 - 994 (E.D.La. 1982) (dispatchers coordinated barge movements, dealt with the Coast Guard, responded to unusual situations, and evaluated profitability of jobs); Goldberg v. Ark. Best Freight Sys., 206 F.Supp. 828 (W.D.Ark. 1962) (dispatchers who assigned employees, equipment and routes); but see contrary authority in Marshall v. Nat'l Freight, 87 Lab.Cas. (CCH) P 33,839 (D.N.J. 1979) (dispatchers not exempt).
According to the Department of Labor's regulations, the work of an employee is directly related to management if it is directly related to assisting with the running or service of a business. For example, courts have found that personnel management tasks satisfy this requirement. Lott v. Howard Wilson Chrysler-Plymouth, Inc., 203 F.3d 326, 331-332 (5th Cir. 2000).
Much of the litigation over the applicability of the administrative exemption concerns the third element concerning the mean of the wording "discretion and independent judgment." The Department of Labor interprets the term "discretion and independent judgment" to exist when the employee engages in the "comparison and the evaluation of possible course of conduct" and acts or makes a decision after the various possibilities have been considered.
In order to possess such discretion, the employee must have the authority to make independent choices "free from immediate direction or supervision ... even if their decisions or recommendations are reviewed at a higher level." Some recurring examples of administratively exempt employees have been coordinators, planners, and dispatchers, as set for the in some representative sample cases.
Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261, 267 (5th Cir. 2000) (employees responsible for planning work requirements and who "schedule the availability of materials needed to accomplish that work" for scheduling the construction of battle ships); Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 374 (7th Cir. 2005), (jobs "concerned with the planning, scheduling, and coordination of activities" necessary to discover and rectify any compliance problems at employer's business); Renfro v. Indiana Michigan Power Company, 370 F.3d 512, 518 (6th Cir. 2004) (planners' work required "interpreting and carrying out plant policies, creating plans that permit the continued operation of the equipment and systems that generate ... [the employer's] main product," namely the generation of electric power); Donovan v. Flowers Marine, Inc., 545 F. Supp. 991, 993 - 994 (E.D.La. 1982) (dispatchers coordinated barge movements, dealt with the Coast Guard, responded to unusual situations, and evaluated profitability of jobs); Goldberg v. Ark. Best Freight Sys., 206 F.Supp. 828 (W.D.Ark. 1962) (dispatchers who assigned employees, equipment and routes); but see contrary authority in Marshall v. Nat'l Freight, 87 Lab.Cas. (CCH) P 33,839 (D.N.J. 1979) (dispatchers not exempt).
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