New ruling sheds light on gray area in FLSA regulations

When you promote an hourly employee to a position with a bigger paycheck and decision-making authority, you can take away non-exempt status and make them an exempt employee, right?

Not so fast.

Facts of the case

Sonae Clark was a clerk at a small nonprofit organization. Her duties included setting up board meetings, preparing agendas and making phone calls.

Eventually, Clark was promoted from “clerk” to “lead clerk” and given a raise. In her new position, she made purchases up to $200, interviewed job candidates, assigned work schedules and even disciplined employees.

However, when she was promoted, she was also reclassified as an exempt employee from FLSA overtime regulations.

Clark fought the reclassification as an exempt employee through a mediation process – and she won back her non-exempt status.

In making its determination, the mediation team noted that despite the employer’s claims that Clark made decisions, she lacked final authority on hiring. Her supervisor retained the final say-so on job candidates.

And while Clark disciplined employees, she first had to seek the board’s approval. In contrast, her supervisor had the authority to discipline without the board’s approval.

This case is a reminder that FLSA classification can be a tricky business. If you’re not certain about an employee’s standing, don’t try to guess.

When in doubt, consult your Human Resources professional and corporate counsel.

Source: 340 NLRB No. 146, LAWPEA.

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