By Peter M. Langdon
The United States Department of Labor (“DOL”) recently issued two Opinion Letters addressing the exempt status of account managers and religiously affiliated employees.
The first Opinion Letter addressed whether account managers are exempt administrative employees under the Fair Labor Standards Act (“FLSA”). The second Opinion Letter discussed the ministerial exception for religiously affiliated employees.
Under the FLSA, employees must be paid at least minimum wage for all hours worked in a workweek and overtime for any time worked in excess of forty (40) hours in a workweek. However, exempt employees are not subject to the overtime requirement. One exemption under the FLSA is the administrative employee exemption.
An exempt administrative employee:
- earns at least $684 per week ($35,568 annually); or
- whose primary duty is office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
- whose primary duty also includes the exercise of discretion and independent judgment with respect to matters of significance.
In one of its Opinion Letters, the DOL applied the FLSA’s administrative exemption to certain account managers who work at a life sciences manufacturer and found those account managers qualify for the administrative exemption.
On the facts, the account managers at issue were required to have either:
- at least a bachelor’s degree in life sciences; or
- a business degree and five (5) years of experience in the life sciences industry.
The account managers engaged with trained scientists about products the company could offer to sell to the scientists that best fit the scientists’ needs. They were not closely supervised and had autonomy in their sales approach in how they interacted with their clients. They also helped clients develop scientific protocols for product use and ensured results were reproducible. Under the circumstances, the account managers were considered exempt administrative employees.
The account managers analyzed in the Opinion Letter may not be regarded as typical account managers given the required knowledge and permissible autonomy in performing this particular account manager job. Many account manager positions neither require the level of expertise or skill present in this specific job position, nor include the exercise of independent judgment and discretion concerning matters of significance as a job duty. As such, any account manager position must independently be reviewed to determine if it meets the administrative employee exemption requirements.
In this Opinion Letter, the DOL confirmed that a not-for-profit daycare and preschool directly controlled by a church could pay certain teachers on a salary basis that would not otherwise comply with the FLSA.
The DOL explained that under the “ministerial exception,” employees of certain religious institutions may be excepted from FLSA coverage because they convey the organization’s message and carry out its mission as part of their job duties, which implicates the First Amendment of the United States Constitution. Here, the DOL assumed certain teachers qualified for the ministerial exception because they conveyed the organizations message and carried out its mission in discharging their job duties. As such, the DOL concluded that the daycare and preschool could pay the teachers at issue on a salary basis that would not otherwise comply with the FLSA.
It should be noted that teachers that do not convey a religious organization’s message and carry out its mission as part of their job duties may not qualify for the ministerial exception.
In the event you may be impacted by the above Opinion Letters, or for any other general questions related to exempt employees or compensation questions under the FLSA, please contact Peter Langdon at email@example.com or Harvey Cooper at firstname.lastname@example.org.