"Administrative" does not mean any employee who performs office or other non-manual work. Instead, it means any employee who earns a minimum salary of $684 per week AND who performs office or other non-manual work for which the employee's primary duty: (i) is directly related to the management or general business operations of the employer or the employer's customers; and (ii) includes the exercise of discretion and independent judgment with respect to matters of significance.
These issues were just front and center in Blackstone v. Dearborn Life Ins. Co.
Nicole Blackstone represented a class of claims adjusters who claimed that their employer misclassified them as exempt under the administrative exemption and therefore unlawfully denied them overtime for all hours worked in excess of 40 in any work week.
The federal court, however, disagreed with the employees and held that the company had properly classified the claims adjusters as exempt administrative employees.
1. The adjusters' "primary duty" is handling disability benefit claims, which is directly related to the management of general business operations of Dearborn or its customers.
2. The adjusters not only gather information from claimants related to their claims, but also evaluate that information to determine whether a claimant is eligible for benefits under the policy, whether a claimant has a disability covered by the policy, whether there are discrepancies or "red flags" on a claim, the amount of benefits to paid, the anticipated length of disability, and whether to approve the claim. In other words, they are not mere paper-pushers, but exercise discretion and independent judgment with respect to matters of significance for their employer.
This case could have just as easily gone the other way. That's how nuanced this exemption is. If you have any doubts about how you've classified your exempt employees, don't wing it; call your employment counsel.
These issues were just front and center in Blackstone v. Dearborn Life Ins. Co.
Nicole Blackstone represented a class of claims adjusters who claimed that their employer misclassified them as exempt under the administrative exemption and therefore unlawfully denied them overtime for all hours worked in excess of 40 in any work week.
The federal court, however, disagreed with the employees and held that the company had properly classified the claims adjusters as exempt administrative employees.
1. The adjusters' "primary duty" is handling disability benefit claims, which is directly related to the management of general business operations of Dearborn or its customers.
2. The adjusters not only gather information from claimants related to their claims, but also evaluate that information to determine whether a claimant is eligible for benefits under the policy, whether a claimant has a disability covered by the policy, whether there are discrepancies or "red flags" on a claim, the amount of benefits to paid, the anticipated length of disability, and whether to approve the claim. In other words, they are not mere paper-pushers, but exercise discretion and independent judgment with respect to matters of significance for their employer.
This case could have just as easily gone the other way. That's how nuanced this exemption is. If you have any doubts about how you've classified your exempt employees, don't wing it; call your employment counsel.