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#58208 - 01/30/03 10:38 PM Exempt and non-exempt status
Gayla Sherry Offline

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Joined: Sep 2002
Posts: 114
Oklahoma City, Oklahoma
I'm discovering several clients of mine who are not complying with the exempt and non-exempt status of the Fair Labor Standards Act, and thought I would share some information that may be helpful.

The determinant of exempt and non-exempt status (which determines whether an employee is paid overtime or is exempt from overtime) is based on the job duties, and these duties must pass certain "tests" as established by the FLSA. In many cases, I've seen bank management designate an employee as exempt, when in fact the employee should be receiving overtime.

Let me know through these posts if you have additional questions about this important issue!
_________________________
Gayla R. Sherry, SPHR, CMC
President, Gayla R. Sherry Associates, Inc.
Helping organizations improve employee morale, retention and productivity
HR Consulting and Compliance; Training, Conflict Resolution, Internal Investigations, Expert Witness

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Human Resources
#58209 - 01/30/03 11:28 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
You are correct. Some of my clients have made wrong classifications, but I apply the tests and correct them as I find them. The exempt classification can be used for a non-exempt position as a "salaried non-exempt" designation. Under this arrangement the position is paid a set "salary" for the pay period, but if the employee works more than 40 hours in the week they are paid at time and a half for the O/T hours. This allows the bank to view this as a "professional position", while maintaining non-exempt status. Use it sparingly !!! In an 80 employee bank, I would have no more than 3 positions in this designation. In a 500 employee banks I would not have more than 10 positions designated as such. It can become a burden to administer. It also creates the "why is that person different than me?" syndrome.

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#58210 - 01/31/03 01:41 AM Re: Exempt and non-exempt status
HRH Dawnie Offline
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HRH Dawnie
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Posts: 7,353
Anchorage Alaska
Just an FYI on the FYI, Bank of America is being sued over this issue. (Officers at the bank (Salaried and considered exempt by BofA)are being reimbursed for years of overtime. Another national bank is on the list of banks to be filed against as we speak.

I've worked for both in the positions referenced and have been receiving the paperwork for some time on the issue.
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#58211 - 01/31/03 05:15 PM Re: Exempt and non-exempt status
Gayla Sherry Offline

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Joined: Sep 2002
Posts: 114
Oklahoma City, Oklahoma
Bob,
I'm finding that some of bank management believe being salaried is a "perk" and use it as a motivational tool. Obviously, this is not apppropriate, nor is it complaint with FLSA.
_________________________
Gayla R. Sherry, SPHR, CMC
President, Gayla R. Sherry Associates, Inc.
Helping organizations improve employee morale, retention and productivity
HR Consulting and Compliance; Training, Conflict Resolution, Internal Investigations, Expert Witness

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#58212 - 01/31/03 05:16 PM Re: Exempt and non-exempt status
Gayla Sherry Offline

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Joined: Sep 2002
Posts: 114
Oklahoma City, Oklahoma
The information about the lawsuits is very interesting; thank you for sharing!
_________________________
Gayla R. Sherry, SPHR, CMC
President, Gayla R. Sherry Associates, Inc.
Helping organizations improve employee morale, retention and productivity
HR Consulting and Compliance; Training, Conflict Resolution, Internal Investigations, Expert Witness

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#58213 - 01/31/03 05:41 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Gayla,
Fact Sheet #23 of the FLSA clearly states "earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings." Salary-non exempt positions are not exempt from the O/T provisions and are allowable under the regs. Banks that pay only a fixed salary to these type of positions with paying O/T are in clear violation of the regs.

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#58214 - 01/31/03 05:57 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Wage and hour investigations look at the last three years of hours worked and earnings on as many current and former employees it feels may have been paid incorrectly. Once they determine the amount owed to these employees they can also assess interest and civil money penalities, among other measures.

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#58215 - 02/04/03 02:49 AM Re: Exempt and non-exempt status
Anonymous
Unregistered

How long after employment has ended can an eligible non-exempt employee make a claim under these regulations?

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#58216 - 02/04/03 03:43 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
The federal statue allows claims to be filed within 3 years of the alledged dispute. You must maintain all pay records (i.e timecards/sheets) for 3 years after termination. Payroll records are maintained 6 years after termination.

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#58217 - 02/04/03 07:58 PM Re: Exempt and non-exempt status
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Bob's answers are of course correct I was contacted about a six month period of 13 years of employment at BofA due to the 3 year rule and 2 years at another national bank. Both parties send some pretty inflamitory stuff at least once a month trying to sway me one way or the other. I'm enjoying the mail
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#58218 - 05/06/03 03:34 PM Re: Exempt and non-exempt status
Anonymous
Unregistered

Do all non-exempt employees keep a timecard including loan officers?

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#58219 - 05/06/03 03:43 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
It depends on your payroll system. Some payroll systems use a manual time card, some are electronic entry through an input device. Regardless of the type of time entry system, employees must sign off on the hours they work each week along with a supervisor verification. This can be done via the time card or a print-out of the hours entered fo that week or payroll period.

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#58220 - 05/06/03 09:52 PM Re: Exempt and non-exempt status
Kara S Offline
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Joined: Oct 2002
Posts: 927
Milwaukee, WI
I personaly would choose to be exempt (even if I worked 20 hrs overtime per week) just so I didn't have to fill out the dang time card!
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My opinions are not to be construed as legal advice.

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#58221 - 05/07/03 12:34 AM Re: Exempt and non-exempt status
Andy_Z Offline
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On the Net
BofA just settled for $4.1million.

Kara, part of the problems here are that the wrong choices are made by the wrong people. Hopefully yours is a correct one based on the facts of employment responsibilities.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#58222 - 05/07/03 02:59 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Also, US Bank got dinged for $3.8 million for misclassifying some of their positions.

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#58223 - 05/09/03 01:37 PM Re: Exempt and non-exempt status
Jeanette Nichols Offline
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Jeanette Nichols
Joined: Apr 2003
Posts: 15
There are recordkeeping requirements for "exempt" employees, although a far cry from the timecard. Here's the address for a great site on this topic.
http://www.toolkit.cch.com/text/PO5_4081.asp Sorry, this is not a "link" since I don't know how to add a link to a message. You'll have to type it in to get there. I don't do technology very well! May 14: Just noticed Boomermom indicated the link didn't work. The line under the link may be causing the problem. There is a _ in the address at the P05_4081. The 0 in P05 is the number 0, not the letter. On this post it's hard to identify. I just tried the address and it works. Hope if works for you too. This may be a paid side, but I am NOT a subscriber and I'm able to use it.
Last edited by Jeanette Nichols CRCM; 05/14/03 01:16 PM.
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#58224 - 05/12/03 04:54 PM Re: Exempt and non-exempt status
Queen Mum Offline
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Queen Mum
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OK
Your link doesn't work. Is this to a subscription site?

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#58225 - 05/12/03 06:14 PM Re: Exempt and non-exempt status
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
BofA took advantage of many employees (my favorite was a promotion which required additional training from 6 am til 9 pm locked in a hotel, 10 days running, no breaks for the weekend or the holiday mine fell on, nor comp time).

You can call them officers, managers, etc., but when you work them like slaves and force them to forgo their personal lifes, you're abusing your staff. Add to that the management structure for the BofA "officers" that was implimented with the promotion....micro management beyond any I've ever seen before. My 3rd grade school days were less closely monitored! Any employer who treats staff like this deserves a $4.1 million fine.

Another real cost of this program? 90% of my compatriots, all the top sellers within the bank, left the bank within one year of institution of the program that really got this law suit started. While we could be replaced with college grads, the production lost in bringing them up to the speed of the top 10% of the sellers in retail who left had to be quite expensive.

Treat your staff with some caring and you'd be amazed what you get out of them!
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#58226 - 05/12/03 07:23 PM Re: Exempt and non-exempt status
Anonymous
Unregistered

Is that a burnt orange covered wagon?

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#58227 - 05/13/03 02:21 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Dawnie, the types of management transgressions are an invitation for organized labor to show up at the door step with signed cards in hand.

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#58228 - 05/13/03 09:41 PM Re: Exempt and non-exempt status
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
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Anchorage Alaska
Bob, you're so right. After many happy years with a wonderful bank it was shocking to be promoted to Vice President and treated like a beginning teller. While I didn't join in the law suit, I enjoyed reading about the issue as it was a question in many peoples minds throughout the training.

The United Canary Workers Union didn't much communicate with us Vice Presidents And to give BofA their due...we were compensated with salary VERY WELL for the time we put in, but...many of us realized, money isn't everything. We want to WANT our jobs as well. I hear this has finally sunk in, but they also decreased the salaries to go with the decreased production. It's all a give and take over time isn't it?
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#58229 - 05/14/03 02:07 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
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Posts: 570
Dallas, Texas
Dawnie, how true, how true. The old saying - what goes around, comes around seems appropriate. Too bad it has to get to the court house to get resolved. I would imagine Human Resources took the blame for most of it.

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#58230 - 06/04/03 07:16 PM Re: Exempt and non-exempt status
Anonymous
Unregistered

Can anyone tell me the types of positions that are usually mis-classified as exempt?

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#58231 - 06/04/03 07:24 PM Re: Exempt and non-exempt status
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
The non-exempt ones...........

OK - seriously. It depends on the individual responsibilities assigned to the position at that specific institution. That's why it is a hard call. A loan officer may be exempt at one institution and non-exempt at another depending on actual responsibilities. The same goes with every other position title.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#58232 - 06/05/03 01:36 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Randy is correct. It will vary by institution and what the responsibilities of the job are. It is a tangled web, and under the proposed regulations it will become more so. What is considered as an exempt position now, could change under the proposed regs and vica-versa. Additionally, position responsibilities change with time and job descriptions may not truly reflect those changes. So just looking at the job description isn't enough. A discussion with the incumbent(s) is also necessary to correctly determine the status of the position.

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#58233 - 06/18/03 05:51 AM Re: Exempt and non-exempt status
Princess Romeo Offline

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Where the heart is
What about the Business Development Officer who spends a lot of time outside the office, meeting clients, taking them to lunch, playing in golf tournaments, etc.?

While I can see an underwriter would not qualify as exempt, it seems weird to pay someone overtime while they're finishing the back 9.
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#58234 - 06/18/03 04:02 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
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Dallas, Texas
Typically, BDO's fall under the "Outside Sales Exemption" if they are customarily and regularly engaged out of the bank to solicit business. They would be exempt. Depending on the size of the bank, salaries can range up to $250k+.

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#58235 - 06/18/03 11:05 PM Re: Exempt and non-exempt status
HRH Dawnie Offline
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Anchorage Alaska
Actually Bob, I was a BDO when the suit with BofA came into play. We were included in the mix, and yes, even with our salaries at six figure levels. (Gad I miss that salary)

While it seems bad to pay overtime for the back nine, I have to say that sometimes Bonnie...I'd have killed for a free afternoon or weekend with no social obligations. All of the darned things were work related (I didn't even live in the same county as I worked) and in the position you sort of have to go. It may be fun...but it's work, and you have to "work" extra at the office to cover the work you miss while working....
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#58236 - 06/27/03 03:36 AM Re: Exempt and non-exempt status
Princess Romeo Offline

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Where the heart is
Have any of you read of the proposed rules by the Bush administration that would reclassify many jobs as "exempt"?

There was an article on MSN - 8 million could lose overtime pay

Anyone have an idea how close this may come to pass?
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#58237 - 06/27/03 02:00 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Quote:

Have any of you read of the proposed rules by the Bush administration that would reclassify many jobs as "exempt"?




The proposed regs came out earlier this year. Public comment has been received. The regs should be finalized and out by the end of the year. As I perform exemption tests for clients, I use both the current and proposed regs as part of my decision process.

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#58238 - 12/10/03 10:05 PM Re: Exempt and non-exempt status
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
I am still fairly new to the HR function. Where do I find the "tests"? We are looking to add a position to our Loan Adm dept that would be a non-officer, supervisory position. The Dept head does not want this position to be eligible for overtime. Thanks!

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#58239 - 12/11/03 01:41 AM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
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Dallas, Texas
Sorry Connie, but it already looks like this position won't pass the test. I will send you the tests tomorrow. I am out of the office and can't get to my office PC.

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#58240 - 12/11/03 06:10 PM Re: Exempt and non-exempt status
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
Connie go here: Side by Side DOL Test. This is a side by side comparison test of the current and new regs. If you get stuck send me a PM and I will walk you through it.

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#58241 - 12/11/03 10:24 PM Re: Exempt and non-exempt status
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
Thanks, Bob! I will use this for future reference. We've decided to make this an officer position with supervisory responsibilities.

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