Rules Complex for Overtime Exemptions

Q: I am a salaried employee and, according to our human relations department, am not eligible for overtime pay. I am not an executive or administrator, nor am I a lawyer, doctor or other “professional.” I am in the marketing department, in charge of my own clients but not in charge of any other employees.

Is my job considered exempt from overtime pay?--C.R., Irvine

A: While you say you are not an administrator, it is possible that you may qualify as an “administrative” employee and therefore may be exempt from overtime pay requirements.

There are complex rules for determining who is an administrative employee. Under state and federal regulations, the primary duties of administrative employees must involve office or nonmanual work directly related to management policies or general business operations of the employer or its customers.

An administrative employee must also regularly exercise independent judgment or discretion. Unlike exempt executive employees, the administrative exemption can apply to employees who, like you, do not supervise other employees.

The administrative exemption includes employees who perform work under limited supervision in specialized or technical duties requiring special training, experience or knowledge. Unlike exempt “professional” employees, however, administrative employees are not licensed professionals.

In some circumstances, marketing representatives have been found to be exempt administrative employees, as have some account executives in advertising agencies.

Whether you are entitled to overtime pay will turn on the nature of your duties and the extent to which you work without direct supervision, make your own judgments and use technical knowledge or specialized skills in your work.

With more detailed information, an employment lawyer or the California labor commissioner should be able tell you whether you fall within the administrative exemption to our overtime laws.

--Joseph L. Paller Jr.

Union, employee attorney

Gilbert & Sackman

Management Solicits Ideas Too Selectively

Q: An executive in my organization has resigned after many years as the organization’s leader, and the administration is looking to replace him.

The organization is made up of several levels of employees. Recently, all the upper-level partners and associates were asked to give input to the group searching for his replacement. But the support staff and other lower-level employees, who represent more than 50% of the organization, were not surveyed.

We think we have something valuable to say about who should lead this organization, but the message to us is clear: “Your input is not valued.” Morale among us is bad because of this.

What would be the best method to get heard, and to bring our concerns to the administration?

--V.M., Fullerton

A: Put your concerns and input in writing and send it to the administrative decision makers. Encourage all of the other employees at your level to contribute to the memo, and have all of them sign it. You may also request a meeting with a higher-level executive if this seems appropriate.

You may find that upper management will be happy to hear about your concerns and interest in the matter.

--Ron Riggio, director

Kravis Leadership Institute

Claremont McKenna College

New Overtime Policy May Force a Job Hunt

Q: The facility where I work has reorganized to become more efficient to reduce production and manufacturing costs. I was recently informed that my overtime hours would be eliminated.

I responded that I understood the company’s position and that because of my financial needs I would be seeking additional employment elsewhere to supplement my income. I also indicated that at times it might be difficult to work overtime at their convenience.

My supervisor’s response was that since this was my primary workplace I would be obligated to work overtime at their convenience and that if I failed to respond to their needs I could be terminated.

Do I have the right to reject their demands that I work overtime? What legal protection do I have against being terminated in this situation?

--A.H., Los Angeles

A: Your employer’s position is legal under the circumstances. You have no rights that are being violated, nor do you have any protection against termination.

Every employer has the right to require employees to work overtime that the employer deems necessary, as long as the employer pays nonexempt employees the premium pay to which they are entitled for overtime. An employee who refuses to work mandatory overtime is insubordinate, and most employers have rules allowing them to terminate employees who are insubordinate.

You seem to be bitter about your employer’s decision to eliminate overtime, and perhaps rightfully so. However, your appropriate course of action is to find another job that compensates you at the level you believe you require, rather than refusing to comply with a directive from your current employer.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky & Walker

Partial Delay of Bonus Might Not Break Law

Q: am an outside salesman for a large metals company. Part of my salary is an annual bonus based on my sales and other factors.

Every year, 30% of the bonus is held back for one year and paid with 70% of the following year’s bonus. If I leave the company, then the 30% that is held back would be paid to me. Is it legal for my company to hold back 30% of my bonus for one year?

--K.R., Los Angeles.

A: It depends how your compensation plan is written. If it says you will earn 100% of a bonus in a given year but 30% will be held back until the following year, it may well be unlawful. California law requires that wages be paid when they are earned.

The fact that your employer would pay you the 30% that was withheld in the event you left the company seems to indicate that your employer believes you have earned the bonus.

But if the 30% is held back to account for charges for, say, returned products or uncollectable accounts, this would indicate that the remaining 30% is not really earned until the following year. In that case, the delayed payment would not be unlawful.

--James J. McDonald Jr.

Attorney, Fisher & Phillips LLP

Labor law instructor, UC Irvine

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If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626; dictate it to (714) 966-7873; or e-mail it to shoptalk@latimes.com. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice.

More on Overtime

* Times on Demand has prepared three pamphlets based on the Shop Talk column. They are answers to readers’ most-asked questions on overtime; unemployment insurance, terminations and medical leave; and job benefits. To order, call (800) 788-8804. Each pamphlet costs $5.41, plus 50 cents delivery. Please allow two to three weeks for mail delivery.