If I asked you to name a few artists, who comes to mind – Rembrandt? Beethoven? Da Vinci? Lennon and McCartney?

How about someone who makes PowerPoint presentations? Not the “death by PowerPoint”, 80 slides, take a nap variety; but high level – high quality ones used for Executive Presentations. Is that person an artist?

This is precisely what a judge in California had to determine in a recent FLSA case. The individual in question created high-level PowerPoint presentations used in complex Sales situations. This employee was paid a salary of $ 95,000 per year for this job. The employer argued this was a highly skilled employee doing creative work for the company. So they asked the judge:

“Why wouldn’t this employee qualify for FLSA’s artistic exemption?”

You make the call – here’s the FLSA requirement:

To qualify for the creative professional exemption, all of the following tests must be met:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;

The employee’s primary duty must be to perform work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor, such as music, writing, acting, and the performing arts.

The fundamental question associated with this case is whether or not the employee is engaged in an activity in a “recognized” field of artistic endeavor. While the job may have some creative aspects and requires artistic talent, the FLSA exemption is limited to actors, musicians, artists and conductors. In the case of our PowerPoint artist, it simply does not meet the test.

This case illustrates the potential landmines associated with FLSA compliance. Employers everywhere struggle with the rules determining minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.

In the past, for many employers this was a risk assessment exercise. They balanced the risk of a Federal and State audit versus the real possibility of the making lion’s share of their jobs non-exempt – if they followed the letter of the law. “This is a normal risk for our industry” was the typical management justification.

The hard truth is we have a very different political environment today. Washington D.C. is keen on new regulatory frameworks and it is clearly not going to get any easier for the employer. The exposure to having to pay a fortune in back wages as the result of an audit has never been higher.

So how does the employer mitigate some of the risk?

1.Keep time records – even if you do not pay overtime. If you do not keep time records the Labor Department can then make “estimates” which are sure to be more costly.

2.Make sure all pay rules are consistently enforced across your entire organization. An Automated Time and Attendance system assures company policies and FLSA rules are adhered to and configured to treat each employee fairly through the consistent application of policies and procedures.

3.Update your job descriptions. Make sure they are clear and accurate.

4.Accurate payment of hours worked including regular, overtime, special pay, holidays and exceptions is critical. Consider a periodic audit of your pay types.

5.Create audit trails of time worked and paid time off. Make sure you have instant access to accruals and historical data.

About Qqest Software
Qqest Software Systems is a time and attendance solutions provider. Clients come to us to streamline their time collection process, improve labor analytics and receive hard dollar ROI through more effective workforce management.