I have an employee that I would like to classify as salaried exempt, as he manages the day-to-day operations of a small department in our factory. In his position he supervises one full-time (40 hours/week) employee and one part-time (20 hours/week) employee. Can I properly classify him as a salaried exempt supervisor, and not pay him overtime?
No. The Fair Labor Standards Act (“FLSA”) requires that in order to be considered an exempt “executive” or supervisory employee, the employee must “customarily and regularly direct the work of two or more” employees. 29 U.S.C. § 541.100(a)(3). The FLSA defines two or more employees to mean “two full-time employees or their equivalent.” 29 U.S.C. §541.104(a). For example, one full-time and two half-time employees are equivalent to two full-time employees. The Department of Labor’s Guidance states that “an exempt supervisor generally must direct a total of 80 employee hours of work each week.” In the scenario you presented, the supervisor would only supervise 60 employee hours of work per week, which would be insufficient to meet this criterion.
Note, however, that the 80 hour requirement is not an absolute minimum. The DOL Guidance notes that if an employer has a “standard” full-time work week of 37-1/2 hours per week, then supervision of a number of employees who work a total of 75 hours or more in a work week would satisfy the equivalent of two “full-time” employees.
For more information, please contact Mitchell W. Quick, a partner in Michael Best's Labor and Employment Relations Practice Group at 414.225.2755, or by e-mail at email@example.com.