Two salary issues have been vexing a number of courts: 1) must court employees be paid for every hour worked when they are “salaried” and 2) may court reporters work during the regular work hours when the reporter is preparing a transcript?
Both state statutes and case law frequently refer to the salaries of public employees in Indiana, from police officers and public welfare employees to firemen and city employees. Are your employees hourly or salaried employees? They are both.
We are paid salaries, no matter what the status of our employment according to the general definition of salary. The simple definition of salary is “an amount of money that an employee is paid each year,” according to the Merriam-Webster on-line dictionary.
While the definition of salary is broad in common use, the United States Department of Labor (DOL) uses a narrow definition in regulations enforcing and interpreting the Fair Labor Standards Act (FLSA). The FLSA requires classification of most employees as either exempt from the FLSA overtime pay requirements or non-exempt and thus subject to the FLSA overtime pay requirements.
The DOL uses the word “salary” as interchangeable for “exempt” and “hourly” as interchangeable for “non-exempt.” There are very different requirements for salaried versus hourly employees as those terms are used by the DOL.
The current white collar exemption to the FLSA requires that the employee be paid a fixed salary not subject to variations in the quality and quantity of work performed (the “salary basis test”); be paid more than $23,000 per year; and, work primarily in executive, administrative or professional duties.
A proposed change is pending which will require an employee to be paid a minimum of $47,892 annually to be classified as an exempt white collar worker. In addition, the DOL proposes an automatic adjustment of this threshold on an annual basis. These proposed changes have caused some law firms and consultants to proactively look at classification of employees, which in turn, has caused some counties to notify the judges in their county that their employees are hourly, not salaried.
This change should have little impact on the courts. By prior rulings of the DOL, almost all court employees are non-exempt and therefore treated as hourly, whether or not the Indiana statutes refer to the employee being paid a salary.
Bailiffs, court reporters, and probation officers are all nonexempt employees by law. Exceptions are managerial positions such as a chief probation officer who supervises two or more employees.
It is appropriate to have an annual salary budgeted and to report that the employees earn an annual salary of a certain sum. However, if a nonexempt employee works more than forty hours in a week, he or she must receive additional compensation in an amount equal to 1.5 times of the hourly rate. The hourly rate is determined by simply dividing the annual salary by 52 weeks and then by the usual hours worked in a week. Thus, a reporter making $32,500 annually in a court that has a 37.5 hour work week will make $16.67 an hour. ($32,500 / by 52 weeks = $625 weekly / 37.5 = $16.67 hourly).
If the reporter works between the 37.5 hours and 40 hours in a week, it is the discretion of the employer whether to give additional compensation or not for those “gap hours”. However, if the reporter works more than 40 hours in a week, the reporter must be paid 1.5 times the hourly rate or be given compensatory time at the rate of 1.5 times the hours worked.
In addition, for those few employees who are exempt and thus salaried as defined by FLSA, the rules are still different than those for private employers. These employees will normally be supervisors, managers, and attorneys.
There is a “public accountability” exception to the usual rule that a salaried exempt employee may take time off during the day without the salary being impacted. The law recognizes that public employers have a duty to the public to ensure that a minimum amount of time is being worked.
Therefore, if the employer has a system that allows for earning and taking of benefit time, the employer can require even exempt employees to use that benefit time or lose pay if the employee doesn’t work a full day. Demos v. City of Indianapolis, 302 F.3d 698 (7th Cir. 2002).
The other hot topic has been court reporters who prepare transcripts and receive pay for those transcripts from either the county or private attorneys. Administrative Rule 15 requires all courts of record to adopt a local rule by which court reporter services in preparing transcriptions are governed.
Three models are set forth in A.R. 15. None of those models authorize a court reporter to prepare a transcript during his or her normal work time for the court, and in addition to the salary, receive payment for the transcription from either the county or a third party.
When being paid by the county to work, the reporter cannot be receiving pay either from the county or another entity on top of the regular salary. If a court reporter is to be paid for the transcript, he/she must do the work during a time other than his/her regular work hours. If the court reporter wants to earn money preparing transcripts during regular hours and use court equipment, he/she must either use benefit time while transcribing, or do the transcription work outside regular working hours.
Much more detail on the FLSA rules can be found on prior Court Times articles on the courts.in.gov website.
The important take-away from this article should be that all court employees are required to work the minimum work week that the court has set. If the employee works less, the employee must use earned benefit time or be docked pay. Secondly, when on the court’s work clock, the employee must be working for the court under the “control direction and direct supervision of the court,” A.R. 15. When preparing a transcript for which the court reporter is going to charge a fee, the reporter is not and cannot be working for the court.
If a judge needs assistance or advice about employment law, contact Brenda Rodeheffer at (317) 234-3936 or