White collar exemptions and WAC’s

Numerous exemptions to overtime exist in Federal and State statutes and regulations.  The most commonly used by employers are the so-called “white collar” exemptions.  Each “white collar” exemption must be supported by several criteria.  Two of the most important criteria are:

  1. The employee’s primary job duty must be to act as a “bona fide” executive (see WAC’s below), administrative or professional worker. Generally, this means that employees must consistently exercise a high degree of independent judgment and discretion, and not be subject to direct supervision or control.  In addition, the discretionary functions of “executive” or “administrative” workers must, in most cases, relate to the overall management of the business, and not merely to its day to day affairs or production operations.

The words that appear in an employee’s job title or job description are generally irrelevant to whether he or she can be lawfully classified as “exempt.”  Rather, it is the worker’s actual job duties that are determinative.

  1. The employee must receive a salary – a predetermined amount of money per pay period that does not vary based upon the quality or quantity of work performed. If you are paid by the hour, and sometimes for less than 40 hours of work per week, you most likely should be receiving overtime pay.

Of course, there are literally thousands of court decisions interpreting the federal and state overtime statutes and regulations, and the analysis must be done on a case-by-case basis.  A qualified attorney can help you determine whether you are owed overtime pay for your work.

The Washington State Department of Labor and Industries (“LNI”) has written the following regulations regarding “white collar” exemptions.

WAC 296-128-510

Executive.

 The term “individual employed in a bona fide executive . . . capacity” in RCW 49.46.010 (5)(c) shall mean any employee:

(1) Whose primary duty consists of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof; and

(2) Who customarily and regularly directs the work of two or more other employees therein; and

(3) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and

(4) Who customarily and regularly exercises discretionary powers; and

(5) Who does not devote more than 20 percent, or, in the case of an employee of a retail or service establishment who does not devote as much as 40 percent, of his hours worked in the work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1) through (4) of this section: Provided, That this paragraph (5) shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment, or who owns at least a 20 percent interest in the enterprise in which he is employed; and

(6) Who is compensated for his services on a salary basis at a rate of not less than $155 per week exclusive of board, lodging, and other facilities: Provided, That an employee who is compensated on a salary rate of not less $250 per week (exclusive of board, lodging, or other facilities), and whose primary duty consists of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof, and includes the customary and regular direction of the work of two or more other employees therein, shall be deemed to meet all of the requirements of this section.

 

WAC 296-128-520

Administrative.

   The term “individual employed in a bona fide . . . administrative . . . capacity” in RCW 49.46.010 (5)(c) shall mean any employee:

(1) Whose primary duty consists of the performance of office or nonmanual field work directly related to management policies or general business operations of his employer or his employer’s customers; or

(2) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and

(3) Who customarily and regularly exercises discretion and independent judgment; and

(a) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined in this regulation), or

(b) Who performs under only general supervision work along specialized or technical lines requiring special training, experience or knowledge, or

(c) Who executes under only general supervision special assignments and tasks; and

(4) Who does not devote more than 20 percent, or, in the case of an employee of a retail or service establishment who does not devote as much as 40 percent of his hours worked in the work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1) through (3) of this section; and

(a) Who is compensated for his services on a salary or fee basis at a rate of not less than $155 per week exclusive of board, lodging, or other facilities; or

(b) Who, in the case of academic administrative personnel is compensated for his services as required by paragraph (4)(a) of this section, or on a salary basis which is at least equal to the entrance salary for teachers in the school system, educational establishment, or institution by which he is employed: Provided, That an employee who is compensated on a salary or fee basis at a rate of not less than $250 per week (exclusive of board, lodging, or other facilities), and whose primary duty consists of the performance of office or nonmanual work directly related to management policies or general business operations of his employer or his employer’s customers; which includes work requiring the exercise of discretion and independent judgment, shall be deemed to meet all of the requirements of this section.

 

WAC 296-128-530

Professional.

The term “individual employed in a bona fide . . . professional capacity” in RCW 49.46.010 (5)(c) shall mean any employee:

(1) Whose primary duty consists of the performance of work:

(a) Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or

(b) Original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the intention, imagination, or talent of the employee; or

(c) Teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge and who is employed and engaged in this activity as a teacher in the school system or educational establishment or institution by which he is employed; and

(2) Whose work requires the consistent exercise of discretion and judgment in its performance; and

(3) Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical or physical work) and is of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time; and

(4) Who does not devote more than 20 percent of his hours worked in the work week to activities which are not an essential part of and necessarily incident to the work described in paragraphs (1) through (3) of this section; and

(5) Who is compensated for his services on a salary or fee basis at a rate of not less than $170 per week exclusive of board, lodging, or facilities: Provided, That this paragraph (5) shall not apply in the case of an employee who is the holder of a valid license or certificate permitting the practice of law, medicine, or dentistry and who is actually engaged in the practice thereof: Provided, That an employee who is compensated on a salary or fee basis at a rate of not less than $250 per week (exclusive of board, lodging, or other facilities), and whose primary duty consists of the performance of work either requiring knowledge of an advanced type in a field of science or learning, which includes work requiring the consistent exercise of discretion and judgment, or requiring invention, imagination, or talent in a recognized field of artistic endeavor, shall be deemed to meet all of the requirements of this section.

If you think you are owed overtime, we’d like to speak with you.  There is no charge for the initial phone consultation.  Please call our Wage and Hour Hotline at 206-694-1684, or write us at overtime@mhb.com.