Increase pay or limit hours is the choice for many employers effective December 1st under a new Department of Labor rule under the Fair Labor Standards Act (FLSA). Employers are under more stringent standards concerning over-time pay for non-exempt employees. Most court employees are, and will remain, classified as non-exempt but courts should be aware of the changes.
Three factors determine the exempt versus non-exempt status of employees: salary level, salary basis, and duties. The rule change doubles the amount an employee must earn to be classified as exempt, increasing from $23,660 to $47,476 annually, or $913 weekly. The vast majority of employees now classified as exempt made more than the previous minimum salary level.
The new salary level minimum is based on an amount equal to the 40th percentile of weekly earnings in the lowest-paid census region, which is the south. It will have a major impact on occupations such as store managers and white collar employees in private corporations.
Certain occupations are deemed exempt even if the employee makes less than the new required salary level of $47,476. Teachers, attorneys, doctors and medical interns or residents are included in this group. Pharmacists, nurses, therapists, dietitians, social workers, and psychologists are non-exempt if paid less than the required salary level. The annual pay of most court employees falls between the old minimum and the new minimum salary level. Probation officers, bailiffs, and court reporters are subject to the salary level test.
The second part of the classification determination is salary basis, which requires that to be considered an exempt employee, the employee must be paid on an annual or weekly basis, rather than an hourly basis. For most employers, if they dock their employee for working less than a normal work week, the employee is considered to be paid hourly and non-exempt.
The salary basis test is applied differently to public employees. Public employers may dock employees for working less than the normal work week if there is an adequate provision for personal and sick leave. Almost all court employees will meet the salary basis test, but many will not meet the salary level test.
The duties test is the most challenging for employers. The employee must be classified in one of several categories to be treated as exempt: executive, administrative, learned professional, creative professional, computer, or outside sales. Learned professional is someone with advanced knowledge in a field of science or a prolonged course of specialized intellectual instruction. All attorneys are exempt employees under the learned professional exemption. For non-attorney court employees, the executive or administrative duties exemption are the only options to be examined when determining exempt versus non-exempt status.
Federal courts have repeatedly ruled that probation officers, bailiffs and court reporters do not meet the duties test to be classified as exempt employees because they do not meet either the administrative or executive exception. Even probation officers with multiple years of experience and/or a Masters degree, who meet the salary level and salary basis requirements, will be classified as non-exempt. To be exempt, a probation officer will have to spend the majority of work time on administrative duties, including supervision of other employees.
It is important to know that no changes have been made to the particular exceptions to the FLSA for public employers. Private employers must pay overtime at time and a half if a non-exempt employee works more than forty hours in a week. Government employers can still continue to give compensatory time in lieu of overtime pay. The requirements for this exception to overtime pay remain the same:
- There has to be an agreement in writing;
- It can be a condition of employment that the employee agree to accept compensatory time in lieu of overtime pay;
- Compensatory time is not required unless the employee has actually worked more than forty hours in one week; and
- If compensatory time builds to 240 hours, the employee must be given overtime pay instead.
While the changes in the FLSA rules are causing major shifts for some occupations and employers, it should have little impact on the judges and court employees of Indiana. It is possible that a few may be impacted.
For example, if a probation officer with only two years of experience is named Chief Probation Officer and supervises two other probation officers, the statutory probation officer salary schedule would require a minimum salary of $44,651.
In that case the Chief Probation Officer would meet the duties and salary basis test, but because of the new minimum salary level test ($47,476), the Chief Probation Officer would be non-exempt. These peculiarities may increase because for the first time, the FLSA rules also provide for the minimum salary level to increase automatically every three years.
If a judge needs assistance or advice about employment law, contact Brenda Rodeheffer at (317) 234-3936 or