The Eleventh Circuit
Court of Appeals recently reaffirmed in Brown v. Nexus Bus. Solutions LLC,
that the Fair Labor Standards Act (“FLSA”) allows an administrative exemption
from overtime provisions. (11th Cir. Apr. 1, 2022). Traditionally, FLSA
requires employees be paid overtime for all hours worked beyond 40 in a week.
The rate of pay is set at least one and a half times the employees’ regular
rate of pay.
An administrative exemption
allows companies to have employees exempt from overtime pay. To qualify for the
administrative exemption, an employee must:
"(1) be paid, on a salary basis, at least $684 per week;
(2) perform office or non-manual work directly related to the employer’s general business operations; and
(3) have as a primary duty “the exercise of discretion with respect to matters of significance.” 29 C.F.R. § 541.200(a)."
In Brown, the
plaintiff was the Business Development Manager for a car dealership and was responsible
for connecting potential corporate buyers with local dealers by generating
leads and making presentations. He was listed as an ‘exempt’ employee and was
not eligible for overtime pay, regardless of working more than 40 hours per
week.
He argued he did not have the primary duty to exercise discretion with respect to matters of significance. The Eleventh Circuit disagreed, noting that the test is “ultimately a holistic determination, but several factors guide the inquiry”, such as if the employee has "authority to make an independent choice, free from immediate direction or supervision”. Id. at 1318, quoting CFR § 541.202(c). The Court re-emphasized the difference between exempt and nonexempt employees. Employers should pay close attention to FLSA regulations and must comply with its overtime requirements for employees under the Act.
