Wage and hour issues pose one of the biggest risks to employers in terms of exposure to litigation and regulatory investigation. If you look closely enough, nearly every employer in the country has an error somewhere. Even if those errors are unintentional, they can result in huge fines and penalties.
Classification of employees as exempt or non-exempt has received a lot of attention from the DOL's Wage and Hour Division. All signs indicate that classification issues will remain a priority in the foreseeable future.
You're probably aware that exempt employees may, as part of their duties and responsibilities, perform non-exempt work from time to time that is "directly and closely related" to their exempt work. For example, a scientist may clean out a test tube during an experiment. Even though non-exempt lab assistants typically perform this work, cleaning out the test tube wouldn't impact the scientist's exempt status.
Taking notes is another good example; a consultant who takes notes during an on-site client visit and types them up to review and analyze them would be performing non-exempt work. Her classification as exempt, however, wouldn't be affected because the review and analysis of those notes is an essential component for completing her exempt work.
But what about cases where the exempt employee is doing more than typing up notes or cleaning out a test tube during the course of an experiment? What if the exempt employee spends entire days performing non-exempt work? Would that affect his classification?
Not if that non-exempt work is performed as a result of an emergency.
Under the Emergency Exception, an exempt employee will not lose the exemption by performing work of a normally nonexempt nature because of an emergency. The DOL provides the following examples of situations that would fall under the emergency exception:
- A manager does nonexempt work to help out during a fire
- An exempt employee pitches in during an unexpected rush order
- An exempt employee replaces a nonexempt worker during the first day or partial day of an unexpected illness
It's important to keep in mind that what seems like an emergency to you may not be an emergency in the eyes of the Wage and Hour Division. In order to qualify as an emergency, the situation must be out of the employer's control and must meet at least one of the following criteria:
- failing to perform the non-exempt work would threaten the safety of employees, customers, or others in the workplace;
- failing to perform the non-exempt work would likely cause a cessation of operations;
- failing to perform the non-exempt work would likely cause serious damage to the employers property.
In these "true emergency" situations, work performed to prevent these kinds of occurrences is considered exempt work.
If you find yourself in the midst of a true emergency, your first priority should be ensuring the safety of everyone in the workplace, protecting your assets, and securing continuity of business operations. All other concerns are secondary. Worrying about whether your exempt employees will lose their exempt classification status shouldn't even make it on to your radar screen.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. Since 1999, she's been working with businesses and government agencies providing expert quantitative analysis. Stephanie's articles on examining compensation systems for internal equity have appeared in professional journals and she has appeared on NPR to discuss the gender wage gap. Stephanie is the founder of Thomas Econometrics Inc., the host of The Proactive Employer radio show, and author of the upcoming book Compensating Your Employees Fairly: A Guide to Internal Pay Equity. Follow her on Twitter at @proactivemployr.
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