Which FLSA exemption do I choose?
January 31, 2012 5:15 PM   Subscribe

Calling all labor lawyers, even though YANML: if you can classify an employee under two overtime-exemptions under the Fair Labor Standards Act, which one controls? For instance, my organization has employees that satisfy one or more categories: 1. Highly Compensated Employees 2. Computer professionals 3. Professional exemption If I classify them as Computer Professionals, they also have to meet the California Labor Code Section 515.5. If they do not qualify under 515.5, specifically the salary requirement and/or high-level engineer requirement, is it possible to just classify them as exempt under the Professional Exemption standard, which is only two times the current minimum wage in California? Thanks.
posted by dhn to Work & Money (6 answers total) 2 users marked this as a favorite
I am am not your lawyer, this is not legal advice, and I don't know anything about whether you can correctly apply the exemptions to your specific employees.

It's not exactly clear what you're asking. Are you asking whether, if you classify an employee as exempt under the Federal computer professional exemption, you can then only apply the California computer software employee exemption to determine whether they're exempt? If that's what you're asking, the answer is no. If the employee meets the requirements of the individual exemptions, it's conceivable that you could have an employee who was exempt under federal law under the federal computer professional exemption and exempt under California law under the California professional exemption (but who might not meet the California computer software exemption). MoonOrb is correct that you analyze them both separately, and especially right that being exempt under the FLSA does not necessarily mean that an employee is exempt under California law. California, in general, has much stricter requirements.
posted by wuzandfuzz at 6:11 PM on January 31, 2012


Just to be on the safe side, and assuming you value the contribution that they make to your company, why not adopt the analysis that results in the most economic benefit to your employees.
posted by mygoditsbob at 6:35 PM on January 31, 2012 [1 favorite]

Yeah, they're either exempt or not, and each law is separate.

This is the kind of thing that you really ought to take to a lawyer. I'd really, really not want to screw around using random advice on this topic in your jurisdiction in particular.
posted by SMPA at 7:06 PM on January 31, 2012 [1 favorite]

Usually, the most specific law applies.

And I don't think it matters what YOU classify the employees as, but what the law classifies them as.
posted by gjc at 7:59 PM on January 31, 2012 [1 favorite]

I am also a California employment lawyer but not your lawyer, etc, as described above - it is a bad idea to do what mygoditsbob is recommending if that would result in you classifying them as exempt when they might not be under the law. I know that some professions really value the idea of being an exempt salaried employee, especially the freedom that can come with not having to keep track of your hours and the perceived prestige associated with being a "professional" of sorts. However, the Labor Commissioner is not going to care that you classified them the way you did because it made them the employees the happiest at the time, they're going to care about whether you violated the law - and it only takes one disgruntled misclassified ex employee to make a complaint and you could be out a lot of money.

I highly recommend that you seek the advice of an attorney, particularly if you're considering using the California software designer exemption - it's notoriously tricky and strict.
posted by wuzandfuzz at 8:24 PM on January 31, 2012 [2 favorites]

However, the Labor Commissioner is not going to care that you classified them the way you did because it made them the employees the happiest at the time, they're going to care about whether you violated the law

Seconding this. You can call an employee just about any damn thing you like. You can even call them independent contractors. But calling them that doesn't actually make them that. If the IRS or state tax board disagrees with your classification, you could easily be up shit creek without a paddle, subject not only to the taxes and/or overtime, etc. you should have paid but penalties for messing around with tax evasion.

Take this to a labor and/or tax attorney and do what they tell you. Odds are decent that there's some arcane regulation out there that tells you what the various tax agencies do in these sorts of situations, but which one it is will depend heavily on the specific facts of your particular situation, so no one here is going to be able to help you.
posted by valkyryn at 5:33 AM on February 1, 2012

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