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Correctly Classifying IT Employees As Exempt or Non-exempt
Created by
- M. Lee Smith Publishers
Content
Excerpted from Tennessee Employment Law Letter written by attorneys at the law firm of Miller & Martin<br />
by Kara Shea<br />
<br />
I'm often asked to give advice about whether employees are exempt from the overtime requirements of federal law. I have to say that it's a pretty easy call about 70 percent of the time. But then there's that troubling 30 percent of jobs that give my clients (and, truth be told, yours truly) heartburn.<br />
<br />
You know what I'm talking about -- well-paid, highly skilled positions that just seem like they should be exempt, but on closer look may not meet the criteria set forth in federal regulations. IT personnel are among the best examples of "gray area" positions. I'm talking specifically about jobs like network administrator and network analyst. Those highly skilled personnel are indispensable to the smooth operation of your organization, and they know how to do stuff you and I don't know how to do, for sure; nevertheless, they may not qualify as exempt employees.<br />
<br />
Audio Conference: Managing IT Workers: Pitfalls to Avoid When Hiring, Classifying, and Firing<br />
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The reason I'm always hesitant to recommend an exempt classification for IT employees is that while they typically wear many hats (ranging from conducting basic help desk functions, to assisting employees with computer problems, to analyzing hardware and software performance, to recommending departmental equipment purchases), their primary function is usually "troubleshooting" as needed to ensure consistent operation of the company's network infrastructure.<br />
<br />
In a recent opinion letter, the U.S. Department of Labor (DOL) specifically stated that "troubleshooting" of this nature is usually not an exempt job function. In fact, the DOL has made it pretty clear that regardless of how indispensable an IT employee's job function may be, he won't be deemed exempt unless he has authority to make decisions on matters of significance. That view particularly impacts staff IT personnel who report to a supervisor who makes all the "big picture" decisions on network administration.<br />
<br />
IT positions are a hot topic for the DOL right now because employees in those jobs are frequently paged after regular work hours to address emergency issues with their employer's computer systems and may therefore work significant amounts of overtime. As a result, the DOL applies particularly close scrutiny in this area to ensure that employers haven't classified their IT personnel as exempt as a way of avoiding paying overtime. Attorneys who represent employees are also targeting IT positions for potential wage and hour class actions. Take a look at the website of a well-known national law firm if you don't believe me: http://www.lieffcabraser.com/itovertime.htm.<br />
<br />
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, includingovertime and employee classification<br />
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Isn't there an exemption that applies specifically to computer employees, you may ask? Well, yes. But, it's a very narrow exemption, applicable only to employees who are involved in the application of systems analysis techniques or who develop or design software or operating systems or perform related functions.<br />
<br />
I'm not trying to say none of your IT employees are exempt from overtime -- the administrative, executive, or even computer employee exemption may apply. What I'm saying is, you shouldn't assume that your IT folks are exempt just because it seems like they should be or because everyone else is doing it that way. This is one of those "heartburn" calls for which the best relief is to get advice from an experienced employment attorney.<br />
<br />
Kara Shea is an editor of Tennessee Employment Law Letter and a partner with Miller & Martin PLLC, practicing in the Nashville office. She can be reached at (615) 244-9270. Kara is also author of the Wage and Hour Compliance Manual and was a presenter at the Wage and Hour Virtual Summit on advanced FLSA compliance strategies <br />
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