Answers to tricky legal questions: Exempt status when employee has 2 jobs
September 30, 2008 by Sam NarisiPosted in: FLSA, In this week's e-newsletter, Latest News & Views, Overtime
Our team of experts fields real-life, everyday questions from HR managers and gives practical answers that can be applied by any HR pro in the same situation. Today’s question: How do you figure out exemptions when an employee works two jobs at the same company?
Question: A full-time exempt employee recently started working a part-time job with us to pick up some extra cash. Is he still exempt?
Answer: That depends on the nature of his work. Employees are either exempt or nonexempt — they can’t be placed into two categories when they work two different types of jobs.
According to a Department of Labor Opinion Letter (FLSA 2005-14), the answer is based on the employee’s “primary duty.” In other words, if his main role is still performing exempt work, then he’s exempt across the board.
But if the primary duty is nonexempt work, then he gets overtime pay for hours worked in both jobs.
October 1st, 2008 at 11:41 am
Can the exempt employee still perform the part-time work and be paid at the regular rate for that job in addition to his salary? Or does he have to become a non-exempt employee and earn OT for the extra work?
October 1st, 2008 at 12:23 pm
This is in response to Martha’s questions. If the part-time work in an otherwise non-exempt job does not result in the employee’s primary duty becoming non-exempt activity (when both jobs are viewed as a whole), the additional work need not be paid at time and one-half. In other words, if the employee continues to qualify for exemption, how the second job is compensated is purely a matter for agreement between the parties (or the employer decides how it will be done). Paying time and one-half would not be required, nor would payment of time and one-half interfere with the exempt status of the employee.
This type of arrangement is not a problem if exemption is solid in the first place. If an employee is “borderline” as to exempt status, adding more non-exempt duties (as in the example) might push the overall job into a non-exempt category. In that case, all hours over 40 (regardless of whether it is the second job that causes the OT hours, or a combination of the two) are owed at time and one-half. Since two rates of pay or methods of pay are probably used, a weighted average approach would be required (half-time added to the regular wages, based on one-half of the weighted average rate after combining all regular wages for all hours of work, then dividing all hours of work into that combined sum).
October 1st, 2008 at 1:05 pm
I’d like to see a response to these replies…
At a previous employer, the non-exempt employee would receive a lump sum for the additional work being done, whether that work was “exempt” or “non-exempt.” The reasoning was that the additional work was outside the scope of the employee’s main position (which was exempt).
October 1st, 2008 at 1:21 pm
Martha – It goes back to the “primary duty clause.” The employee can’t make the determination to “go non-exempt.” It’s the FLSA guidelines which determine exempt or non-exempt status.
October 2nd, 2008 at 12:23 pm
Would it make more sense to pay on the part time job as an IC??
October 3rd, 2008 at 11:20 am
I agree with Larry. Regarding Tommy’s IC question, that will not work. FLSA definitions of “employ,” “employee,” and “employer” are so broad that many “IC” or other 1099 arrangements, such as “contract labor,” are erroneous if the employer assumes that overtime compensation is not required. When the worker is already an employee in the full-time job, an attempt to classify that person as an IC for the second job (with the same or a joint employer) will be viewed by DOL or the courts as an attempt to evade the FLSA.
If exemption continues to be clear, there is no reason to attempt such a tactic. If exemption is in doubt, the second job’s pay and hours should be combined with the full-time job’s pay and hours, then OT compensation should be correctly computed and paid.
November 18th, 2008 at 1:45 pm
Is there a limit on how many additional hours per pay period an exempt employee can work in a second non-exempt position for the same employer, to earn extra cash?
February 11th, 2009 at 5:56 am
Can part time bus drivers who work 3 hours a day for 10 months be classified exempt status in the state of Florida? The only other work they would perform would be field trip driving and there is a set price for those trips.
February 17th, 2009 at 7:17 pm
Joan, there is no specific limit on the hours worked per pay period in the side job. However, see the Editor’s answer to the initial question (scroll to the top). If the primary duties are no longer exempt activity, the exemption has been lost.
How much flexibility exists depends on just how solid the exemption classification is. If the employee just barely meets the primary duty test, the hours devoted to a side job will probably result in loss of exemption. If the employee not only meets the primary duty test, but (for example) 90% of his or her time is ordinarily devoted to exempt work, even working significant hours in the side job probably will have no effect on the exemption. Another consideration is that the primary duty rule probably applies over a representative period of time, not just a workweek, so one week with more hours than usual in nonexempt work is not likely to result in loss of exemption.
Richard, Florida has a MW law but I do not believe that it has an OT provision, or maybe it requires employers to follow the federal standards. You could nail that down by contacting the appropriate Florida agency. Most of the states in the South do not have OT standards that exceed the federal provisions. My comments are solely about FLSA (federal law).
The exemptions that are discussed in this thread are derived from FLSA Sections 13(a)(1) and 13(a)(17) – the “white collar” exemptions. Bus drivers do not qualify for any of those exemptions. If the “motor carrier” exemption applies, it does not matter whether the employee is full time or part time, or how the pay is computed (per trip, etc.) – those factors have no effect on application of the exemption.
Your reference to “field trips” indicates that you are asking about school bus drivers. They are generally subject to the FLSA MW and OT standards. Paying for field trips on a per trip basis is fine, but the employer is obligated to combine all hours and all earnings for the workweek, calculate the regular rate (can’t be less than MW), and – if the combined hours exceed 40, pay the half-time overtime premium for the OT hours (in addition to all regular wages).
March 11th, 2009 at 10:58 am
I have a situation where I am a Director of Operations, however I also have a degree in Radiology and are asked to perform x-rays when the other Technologist is absent or busy. FYI, this the only other x-ray technologist has 5 weeks vacation a year. This often requires me to work extended hours to make up for my exempt job that I cannot get to during normal business hours b/c I am busy filming etc…I end up staying at work late to complete Director duties…does this seem fair? Should I be getting a lump sum or separate wage aside from my salary for doing this work?
March 11th, 2009 at 1:15 pm
Red – if your job description has the x-ray duties as part of the position, then I think you are stuck. Whoever designed these work requirements needs to recognize the additional duties almost require an additional person. I’d lobby for a raise or change of responsibilities or additional x-ray help.
March 11th, 2009 at 1:38 pm
It’s nowhere in my Letter of Agreement. It’s really gotten to the point where on occasion it prohibits me from delivering quality customer service to our accounts. Most of all, it can be very tiresome to “switch” gears several times a day and go from Operations Director to X-ray technologist. I don’t want to appear that I am complaining to the owners but I am sure it does come across that way. They don’t understand that it’s two completely different positions. One exempt and one non-exempt. They feel in this economy it’s a great way to save money. It’s tough to talk about with them without looking like you are not a worker..ya know?
March 12th, 2009 at 9:36 am
Red, if your radiology degree and other facts meet the qualifications of a medical technologist, as set forth in 29 CFR Part 541, Section 541.301, it is possible that the additional work that you are performing would not be treated as non-exempt because it is possible to “tack” two or more exemptions together. This is what the regulations say about the possibility that a medical technologist may qualify for the learned professional exemption:
541.301 “(e) (1) Registered or certified medical technologists. Registered
or certified medical technologists who have successfully completed
three academic years of pre-professional study in an accredited college
or university plus a fourth year of professional course work in a
school of medical technology approved by the Council of Medical
Education of the American Medical Association generally meet the duties
requirements for the learned professional exemption.”
Even if there is doubt about whether the technology work is exempt, it would not cause you to be nonexempt unless your exemption classification is shaky to begin with. Please see the comments about “primary duty” in my February 17th post (above).
March 17th, 2009 at 3:59 pm
How is the exemption status determined for contract employees? That is, employees that are contracted through a third party organization for work.
Do they go by the same FLSA guidelines as regular employees or are the different guidelines that should be followed to classify these individuals as exempt vs. non-exempt?
March 18th, 2009 at 10:31 am
Danielle, for FLSA purposes such employees are jointly employed by the PEO or staffing firm and the firm or organization within which they are performing work. In the usual case, exemption is determined in the same manner as when there is only one firm employing the workers. There is not ordinarily a complicating factor (because of two or more employers) when making a classification determination under the 541 (white collar or computer) exemptions. With a few other exemption sections in FLSA, it gets more complex.
The primary difference in the scenario that you are describing has to do with the outcome of a misclassification; both employers are responsible for FLSA compliance. It is in the best interest of each employer to ensure that the classification of exemption is correct, or to make sure that all hours are compensated and that OT is properly paid.
May 26th, 2009 at 12:31 pm
I was hired for one job as a secretary to one office. However, the temporary for the second position was let go due to the budget restraints. Because my office is the Vocal and General Music office and the other is Instrumental Music, I guess its assume that I can do both. The second postion has its own supervisor, which now I have two supervisors. I am the only secretary in this departmnet that has been working for two supervisors in the past six months. Now, I am doing both jobs without any ramifications. Should I receive second pay, should the second job be shared with the other secretaries in the department, or should it be given to the secretary who has noticeably less work to do.
June 17th, 2009 at 3:01 pm
In response to C. Cook’s question, there are no FLSA provisions that set standards for employers to follow in scenarios such as yours. Your description does not indicate violations on the part of your employer.
You did not mention the hours that you work. If the consolidation of these jobs results in your working more than forty hours weekly, you should receive overtime pay. Even though you now work for two departments and two supervisors, all of your hours of work must be combined. The FLSA does not permit the employer to ignore your overtime hours or to pay for them at only straight time.